Egypt gas expansion still risky despite desert discovery: experts

Egypt’s Ministry of Petroleum and Mineral Resources has discovered significant natural gas deposits in the country’s Western Desert, but the North African country still faces significant risks to developing its gas resources.

The ministry announced in November that Khalda Petroleum Company struck gas at the exploratory well Gomana-1, with electrical logs confirming gas-bearing zones.

This new gas discovery in Egypt was made in the Western Desert’s Badr-15 area, with a production capacity of 16 million cubic feet of gas and 750 barrels of condensate daily. According to the ministry, almost 15 billion cubic feet of gas is expected to be added to Egypt’s reserves from this new field.

This is happening as part of the ministry’s investment incentive measures to gradually increase production and reduce imports.

Egyptian Petroleum Minister Karim Badawi, earlier noted that the ministry looks forward to raising gas production to 6.4 and 6.6 billion cubic feet per day over the next 5 years. This also includes support from prominent international investments.

The minister added that domestic gas and petroleum production have declined since 2021 due to reduced investment. However, the efforts to enhance the investment climate have indeed halted the dip and restored the much-needed growth.

Meeting domestic gas demand to reduce import dependence

Mariam Ahmed, Senior Research Analyst at Egypt Oil & Gas, told Gas Outlook that recent onshore discoveries in the Western Desert align with Egypt’s short-term plan to stabilise domestic gas supply. She said these fields are quicker and cheaper to develop than offshore projects.

“They help meet immediate demand from power generation and industry, reducing pressure on imports and boosting exports. Planned offshore exploration in the Mediterranean plays a longer-term role, aimed at maintaining production as older fields decline. Together, onshore and offshore exploration create a balanced supply strategy backed by recent investment incentives that attract international oil companies to Egypt’s resources.”

She emphasised that Egypt can stabilise domestic gas supply and reduce its reliance on spot LNG imports during peak demand periods by prioritising incremental onshore production alongside offshore development.

“More gas can be sent to the existing liquefaction facilities as local output recovers, enhancing Egypt’s position as a hub for regional processing and transit rather than a pure exporter.

“Even though export volumes are still sensitive to domestic consumption needs, Egypt is able to arbitrage regional gas flows, improve supply security, and maintain strategic relevance in Eastern Mediterranean gas markets thanks to upstream investment, under-utilised LNG infrastructure, and pipeline connections to neighbouring producers,” she added.

Katlong Alex, an energy sustainability analyst at the African Energy Council, also noted that Egypt is taking a two-pronged approach to secure its energy future. He said onshore discoveries like Gomana‑1 and Badr‑15 in the Western Desert provide quick, incremental gas volumes to help stabilise supply and offset declines in older fields.

Alex told Gas Outlook that increasing domestic production through onshore finds like Gomana‑1 and Badr‑15, Egypt can avoid costly LNG imports during peak demand periods, saving foreign exchange and improving energy security.

“At the same time, sustained investment in offshore exploration ensures long-term reserves, allowing Egypt to maintain surplus gas for export. This surplus feeds LNG terminals at Idku and Damietta and supports pipeline flows to regional markets, reinforcing Egypt’s role as a reliable supplier in the Eastern Mediterranean. In short, more local gas means fewer imports and more leverage as a regional energy hub.”

Constraints & risks

Mariam noted that the risks associated with Egypt’s gas expansion strategy include declining production from mature fields, capital-intensive offshore projects, and exposure to gas price fluctuations. She said export flexibility may also be restricted by growing domestic demand.

“But the development of gas is not happening in a vacuum. Egypt has been promoting renewable energy in addition to luring upstream gas investment; numerous solar and wind projects, as well as new investment agreements, are currently in progress.

“As global climate and demand pressures increase, the long-term challenge is to maintain this balance, making sure gas supports energy security without displacing renewables or causing carbon lock-in.”

Alex noted that Egypt’s gas expansion strategy faces several risks. He said financial constraints are a major challenge, global capital for fossil projects is tightening, and exploration costs remain high.

“Operational risks include reservoir uncertainty and infrastructure bottlenecks, especially in remote onshore areas. Geopolitical factors, like regional instability, can also disrupt investment flows.

“On the climate side, doubling down on gas risks locking Egypt into a carbon intensive pathway. While gas is cleaner than oil, it still emits carbon emission and methane, which could undermine Egypt’s long-term climate commitments under the Paris Agreement.

“Heavy investment in gas infrastructure may slow the shift to renewables, creating a future transition risk as global markets move toward low carbon energy,” he said.

Regional instability and volatility in gas markets

However, Alex said regional instability and gas market volatility is a tough challenge. He said Egypt has strong advantages, existing LNG infrastructure, strategic location, and regional partnerships, but the landscape is changing fast.

“Global demand for gas may plateau as countries accelerate their energy transition, and climate policies could make financing fossil projects harder. Regional instability adds another layer of uncertainty, from supply chain risks to geopolitical tensions.

“So while Egypt can leverage its current position in the short to medium term, a purely fossil-fuel export model is unlikely to be sustainable long-term. Success will depend on diversifying energy exports, integrating renewables, and aligning with global decarbonisation trends to stay competitive.”

Mariam also noted that Egypt has many competitive advantages, including pipelines, growing upstream production, and existing LNG infrastructure, but regional markets are still unstable and the demand for gas worldwide is becoming less certain.

“According to that, Egypt seems to pursue a mixed energy export model, which combines gas exports with renewable energy projects, as opposed to a hub that is solely focused on fossil fuels.

“The country hopes to preserve its regional power, control market and climate risks, and establish a flexible, forward-thinking energy hub that can adjust to changing global demand by drawing investments in both fossil fuels and renewable energy,” she ended.

(Writing by Samuel Ajala; editing by Sophie Davies)