LNG in World Markets Featured Article

Egypt has negotiated deals with multiple suppliers for close to 300 LNG cargoes in total, to be delivered over the next three years, as it looks to meet rising gas demand amid lower-than-expected existing and projected domestic output and regional supply uncertainty. It is still in talks with more sellers for additional cargoes.

The deals will impact spot LNG forward price curves and market fundamentals, as Egypt competes with key buyers in Europe and China for cargoes. Prompt spot prices also face upside as suppliers start to fill these short positions.

Egypt’s Floating LNG Terminals

State-run Egas – Egypt’s primary LNG importer – is heard to have secured over 200 cargoes for deliveries mostly from July 2025 to June 2026. Some 60 shipments will be supplied by Shell and TotalEnergies – 30 each via separate contracts that commenced in March. Deliveries are ratable at a total of five cargoes a month over the year, sources said. The supply was heard to be sold at a significant premium to the TTF European gas benchmark.

Egas is understood to have fixed approximately140-145 of the cargoes with multiple sellers via bilateral negotiations in recent months. Some of the cargoes may be options for the buyer or seller to exercise.

The firm will pay TTF premiums that range from 80¢/MMBtu to $1.30/MMBtu for these cargoes, sources said. The relatively high prices reflect factors like shipping netback, credit rating issues, payment and operational risks, regional uncertainty and longer-than-usual credit terms.

Egas is seeking credit payment terms of around 180-360 days from cargo discharge, a jump from 90 days sought previously, sources said. These are much longer than the typical10-12 business days for spot LNG cargoes. The sellers are now mulling the associated risks and could add an additional price premium of at least50¢/MMBtu to current TTF constants, to reflect higher bank charges, loss of potential interest income and ‘failure-to-take’ concerns.

Egypt is heard to have obtained financing from regional and/or global allies, and loans from global financial institutions, before it signed those deals. The country regularly receives financial support and in­vestments from allies Saudi Arabia and the United Arab Emirates.

The bulk of the 140-145 shipments will come from Saudi Aramco, Shell and trading firms Trafigura and Hartree Partners, sources said. Other suppliers include TotalEnergies, Socar Trading, Vitol and Swiss-based BGN Energy, a Turkish trading firm that is relatively new to LNG.

Egas will possibly take the cargoes at a schedule of around 15 cargoes a month in 3Q 2025 and 2Q 2026. Deliveries will ramp down during the northern hemisphere winter months in 4Q 2025 and 1Q 2026, sources said. Spot prices typically spike during winter – and Egypt’ speak-demand period is usually summer, from around early July.

Egas and fellow Egyptian state firm Egypt Petroleum want more spot and strip LNG cargoes and are talking to more sellers for volumes. One seller, BGN Energy, reportedly said it will supply 42 cargoes to Egypt over the next 2-3 years at TTF premiums.

Egas’ short-term LNG demand could be boosted by increased supply disruption risks from Israel’s key gas fields, amid Iran-Israel tensions that previously caused production shut ins. The fields, which have 30 Bcm/y of production capacity, supply neighboring Egypt and Jordan (see p.21).

Spot market participants are watching Egypt closely. Strong Egyptian LNG demand means key buyers from Northeast Asia, South Asia and Southeast Asia will face increased competition for cargoes, which could lift spot prices. Sellers, however, are also preparing for ‘failure-to-receive’ possibilities that could lead to prompt and/or distressed resales. Sustained reselling and diversion activity could affect global demand-supply balances, shipping markets and cargo financing.

Egypt’s Floating LNG Terminals

Egypt boosts regasification capacity via FSRUs

Egypt’s near-term LNG buying spree is supported by its anticipated surge in regasification capacity.

Egas is looking to have four floating storage and regasification units (FSRUs) online by early July, in time for peak-demand summer. The FSRUs were secured via time charter party agreements, most of which were signed recently (see Map).

The firm signed a 10-year time charter with New Fortress Energy for the Energos Eskimo FSRU, which was previously deployed at Jordan’s Aqaba port. The time charter is intended to start in July or August.

Egas will also take the Energos Power FSRU on a time charter sublet from the German government. Berlin had chartered the FSRU from Energos Infrastructure in early 2024 for 10 years, following Russia’s invasion of Ukraine. The ship will reportedly spend the rest of its time charter in Egypt’s Alexandria Port or Ain Sukhna Port instead of Germany

The Hoegh Galleon FSRU, meanwhile, will continue to operate at Egypt’s Ain Sukhna until mid-2027, after which it will head to Australia’s New South Wales state for deployment at the planned Port Kembla terminal (see LNGWM, Mar ’25). Australian firm AIE and Hoegh Evi sublet the Hoegh Galleon FSRU to Egypt in June 2024 on a short-term charter.

These three FSRUs will reportedly have a total regasification capacity of around 17 MMt/y.

Egas will also receive the Ertugrul Gazi FSRU from Turkey’s Botas on a seasonal basis, as a back-up facility over peak demand periods. The FSRU will be deployed at Egypt’s Ain Sukhna in the summer months of 2025 and return to Turkey’s Dortyol for the rest of the year. The arrangement is the world’s first example of a shared use of FSRUs between two countries, Botas said, and may last for a couple of years.

Further ahead, Egas signed a 10-year charter deal with Hoegh Evi in May for an FSRU, which will start around 4Q 2026. Hoegh Evi will convert the Hoegh Gandria LNG carrier to an FSRU – works will start this year at the Seatrium shipyard in Singapore and are poised to end before 4Q 2026.The charter rate is heard at around $150,000/d, reflecting a $184 million ship purchase price and conversion costs at around $100-$150 million (see LNGWM Mid-Month, May ’25).The Hoegh Gandria FSRU will replace the Hoegh Galleon FSRU when the latter’s charter agreement expires.