The Egyptian government is seeking to capitalize on the energy wealth of the Caspian Sea, one of the world’s regions richest in hydrocarbon reserves, by offering partnership arrangements to three Caspian littoral states under which Egypt would liquefy their extracted gas and re-export it to European markets, according to a source familiar with the Ministry of Petroleum’s export portfolio.
The source, who requested anonymity, told Al Manassa that the government is preparing to hold talks with the three countries, Azerbaijan, Kazakhstan and Turkmenistan, individually to present a proposal, beginning in 2027, for utilizing Egypt’s energy infrastructure and leveraging its geographic position to deliver gas to Europe.
Speaking at Baku Energy Week in the Azerbaijani capital two days ago, Minister of Petroleum and Mineral Resources Karim Badawi said Egypt possesses the capabilities needed to serve as an energy bridge linking the Caspian region and Europe.
The source added that one of Egypt’s most prominent potential partners is Azerbaijan, one of the largest producers and exporters of oil and natural gas in the Caspian region, with multiple export routes. Cooperation opportunities would also include Kazakhstan, given its substantial crude oil and petroleum-product resources, and Turkmenistan, whose vast natural gas reserves could help diversify Egypt’s supply sources in the future.
According to the source, the discussions would involve the use of Egypt’s liquefied natural gas facilities in Edku and Damietta before exporting to European markets. The talks would also cover the use of Egypt’s storage facilities amid volatility in global energy markets and uncertainty surrounding the return of stability to oil and gas markets in the Gulf and the wider Middle East.
The source said negotiations with the countries concerned would explore several mechanisms, including purchase-and-resale arrangements for export, as well as joint investment deals in production and infrastructure projects.
Egypt currently has two agreements related to natural gas liquefaction. Under the first, with Israel, gas is liquefied in Egypt and exported to markets in Europe and Asia. This is only implemented when there is no domestic need for Israeli gas.
The second agreement is between Egypt and Cyprus and stipulates the transfer of Cypriot gas to Egypt for liquefaction and re-export abroad. It is scheduled to enter into force during fiscal year 2027/28.
Under these agreements, Egypt derives two key benefits: revenues from liquefaction services at the Edku and Damietta facilities, and fees from transportation and the use of Egyptian pipeline networks for gas transit operations.
