Egypt has made a string of major gas discoveries over the past two months — capped by its biggest find in the Western Desert in 15 years — as the Iran war drives energy demands to record highs, poising Cairo for a return to its role as a major gas export hub.
“I think the new discoveries will help address Egypt’s challenging energy balances but are unlikely to be transformational,” said Bill Farren-Price, head of gas research at the Oxford Institute for Energy Studies.
“Rising power demand is still likely to outpace upstream gains, although the reforms are likely to pull in more international companies and reinvigorate those already in country,” he continued.
In the space of two months Egypt announced three significant gas finds, all linked to Eni, the Italian oil and gas supermajor who is the operator or founding member in the entities that made the finds and has been active in Egypt since 1954.
Record discoveries
In April, Eni and BP unveiled Denise West, an offshore Mediterranean discovery estimated at around 2 trillion cubic feet of gas.
“At 2 trillion cubic feet of gas in place, Denise West is the biggest gas discovery in Egypt since Chevron’s 2023 Nargis find,” said Martijn Murphy, principal analyst for North Africa upstream at Wood Mackenzie.
“Proximity to existing infrastructure, operated by Eni, offers the possibility for a fast-track development.”
In early May came Nidoco N-2 in the Nile Delta’s West Abu Madi area, operated by Eni and BP through their Petrobel joint venture, expected to add around 50 million cubic feet per day.
Later in May, Agiba Petroleum — a joint venture between Eni and state-owned EGPC — announced South Bostan-1X in the Western Desert, with initial estimates of 330 billion cubic feet of gas, 10 million barrels of condensates and crude, and total reserves of roughly 70 million barrels of oil equivalent.
Murphy said South Bostan was smaller than Denise West but still notable for an onshore Western Desert discovery, where mature acreage can offer lower-cost opportunities close to existing infrastructure.
“Both discoveries will bolster flagging domestic gas production and the need for costlier imported LNG cargoes,” he said.
All three lie close to existing infrastructure, which analysts say is key to bringing them onstream quickly and at lower cost.
Together, they point to renewed drilling momentum after years of falling domestic production and growing pressure on Egypt’s foreign currency reserves from energy imports.
Fast-track finds, slow-burning impact
For Egypt, the timing matters. The country was once seen as a regional gas export hub, supported by major fields such as Zohr and its LNG plants at Idku and Damietta.
But declining output and rising domestic consumption have forced Cairo back into importing LNG, even as it continues to promote itself as a future route for East Mediterranean gas.
Abdelaziz Khlaifat, professor and chair of petroleum and energy engineering at the American University in Cairo, said the finds reflect a deliberate shift in strategy — away from chasing another Zohr and toward faster, cheaper development close to existing infrastructure.
“While neither matches the scale of Zohr, together they reflect a more practical Egyptian strategy centred on infrastructure-led exploration, faster project development, and reducing import dependence,” he said.
Murphy was more blunt. “The supply/demand balance has grown from a gap to a chasm,” he said. “It would take transformational exploration success to materially ease Egypt’s gas imports.”
Closing out debts to revive drilling
The discoveries haven’t happened in a vacuum. Egypt has spent the past year clearing debts owed to foreign energy companies — payment delays that had quietly choked upstream activity for years.
Murphy said the repayment push was as important as any single find. “The reduction in arrears is a big driver of renewed exploration momentum in Egypt. Arrears have come down significantly as the government prioritises a clean slate by mid-year.”
Khlaifat said the effect on operator confidence had been tangible. “Better payment discipline and more flexible commercial terms have helped restore confidence among operators such as Eni, BP, and Shell.”
The export question
Still, analysts say Egypt’s LNG export ambitions will depend on more than domestic discoveries. Cairo has continued to position itself as a regional gas hub, with potential flows from Israel and Cyprus feeding into Egyptian infrastructure and LNG plants.
A recently approved $35bn (€30bn) deal would expand gas exports from Israel’s Leviathan field to Egypt from 2026 to 2040.
The additional pipeline gas could help Egypt reduce reliance on costlier LNG imports, although domestic shortages mean any return to steady exports depends first on covering local demand.
Cyprus is also moving towards Egypt as a route to market. In April, partners in the Aphrodite field signed a 15-year agreement to sell gas to Egypt’s state gas buyer.
Last week, ExxonMobil and QatarEnergy signed a separate deal to study bringing gas from Cyprus’s Glaucus and Pegasus discoveries to Egypt through existing LNG infrastructure.
“The most interesting thing will be to see whether Cypriot and Israeli gas can help rebuild confidence in Egyptian LNG exports in the medium term,” Farren-Price said.
But third-party gas doesn’t solve the immediate problem. “These are modest-sized discoveries which will be eaten up by Egypt’s colossal domestic market once onstream,” Murphy said.
“If Egypt is to realise these ambitions, domestic demand must first be met.”