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Egypt is rapidly expanding its LNG import capacity – but pipelines will play a critical role in meeting its gas security requirements. The country’s gas balance still hinges on affordable pipeline flows from Israel even amid a flurry of new floating storage and regasification units (FSRUs).

The 12 day shutdown of Israel’s Leviathan field in June 2025 proved the point. When Israel halted exports, 16 million m³/d - the equivalent of 4 million tpy - stopped flowing through the East Mediterranean Gas (EMG) pipeline. With only one LNG import terminal - the Hoegh Galleon FSRU at Ain Sokhna - already operating at maximum capacity, Egypt could not offset the lost supply. The impact was immediate: fertilizer, petrochemical, and urea plants were cut off within a day, diverting gas toward power generation. Jordan - which relies on Israeli volumes for 60% of its power - rushed to reverse the Arab Gas Pipeline (AGP) to draw emergency flows from Egypt. The disruption exposed how brittle and interdependent the region’s gas grid remains. Even as Egypt races to install more FSRUs, it cannot simply swap the pipelines for LNG.

Falling domestic production since mid 2024 has flipped Egypt from being a net LNG exporter to a net importer. Egypt scrambled to secure new FSRUs to meet peak summer cooling demand. The Hoegh Galleon FSRU arrived in June 2024, followed by the sub chartered Energos Eskimo, which received its first cargo on 15 July 2025. The Energos Power came online on 19 July, with two more - Energos Winter and Energos Force - scheduled for August. With the Hoegh Gandria joining in 4Q26, Egypt’s regasification capacity is set to vastly exceed current pipeline imports. Even so, pipeline flows into Egypt will remain indispensable for two reasons.

Firstly, LNG imports are financially unsustainable for Egypt. Dollar denominated cargoes force Egypt to burn scarce foreign exchange reserves or negotiate deferred payments, deepening its fragile balance of payments. The country remains under a US$8 billion IMF programme, now on its fifth review to unlock another tranche. Yet summer 2025 alone will cost over US$9 billion in LNG imports, plus another US$600 - 700 million for fuel oil. This steep energy bill is expected to strain the country’s foreign exchange reserves further and put downward pressure on the Egyptian pound. New LNG purchases could fuel inflation, increase the cost of other critical imports, and deepen Egypt’s fiscal hole. By contrast, pipeline gas under longer term contracts is cheaper and insulated from volatile LNG spot prices. It is not just affordable - it is financially essential. .

Secondly, Israel’s growing gas surplus next door is expected to become ever more accessible to Egypt through planned pipeline upgrades. Leviathan alone already supplies over half of Egypt’s imported gas, at around 14 billion m³ in 2024. The field’s phased expansion will lift Israeli output from 28 billion m³ to more than 40 billion m³ by 2030. Expansion projects at the Tamar field, also exporting to Egypt and Jordan, will further create additional volume Egypt has every incentive to secure. Alternative export options are limited: Israel’s proposed FLNG project was shelved on cost grounds, meaning its surplus gas remains captive to regional pipelines. .

Planned pipeline expansions could channel these extra volumes to Egypt. The EMG pipeline connection between Ashkelon and Arish (currently at a capacity of 6 billion m³) is slated for an additional 2 billion m³ expansion, while the proposed Nitzana pipeline would add another 6 billion m³. Meanwhile, the AGP – once designed to export Egyptian gas – can flow in reverse, pulling additional gas from Jordan into Egypt.

By Antonia Syn, Analyst, Commodity Markets Research – Gas & LNG, Rystad Energy.

Comment

Reduced flow has been noted on several US-bound Canadian pipelines following the introduction of US tariffs in March: “Since the announcement, Wood Mackenzie’s real-time pipeline monitoring has detected flow reductions along three major crude systems that deliver Canadian crude to US markets: Southbow’s 590 000 bpd Keystone - Hardisty to Steele City pipeline, TransMountain’s 890 000 bpd TransMountain system, and Enbridge’s 307 000 bpd Express pipeline.”¹

Canada is the world’s fourth largest oil exporter, but it sends some 75% of its exports to the US. There is major political momentum towards new pipeline projects and the majority of Canadians support building new oil infrastructure in order to patch this vulnerability, according to a poll conducted by The Globe and Mail.²

Much is happening towards the goal this summer. “Now the real work starts” said Carney as he marked the passage of Bill C-5 on 26 June, which grants powers to the cabinet to fast-track infrastructure projects. At the Calgary Stampede on 5 July, Prime Minister Mark Carney said that a new oil pipeline to Canada’s Pacific coast is set to make it onto the federal government’s list of projects of national interest. “I would think, given the scale of the economic opportunity, the resources we have, the expertise we have, that it is highly, highly likely that we will have an oil pipeline that is a proposal for one of these projects of national interest.”³ Carney added that he also supports a proposed CAN$16.5 billion carbon capture system for Alberta’s oilsands.

The day after Carney’s comments, Alberta and Ontario signed a deal to work together to help fast track investments in energy infrastructure. The two provinces want Ottawa to amend or repeal the Impact Assessment Act, and repeal the Oil Tanker Moratorium Act, Clean Electricity Regulations, the Oil and Gas Sector Greenhouse Gas Emissions Cap, and other federal initiatives that “discriminately impact the energy sector”, said a statement from the Alberta government.

On 22 July, Ontario, Alberta, and Saskatchewan announced a new MoU to construct new pipelines using Ontario steel, and build new rail lines to transport critical minerals from Ontario to Western Canada.

So is a revived Northern Gateway project on the cards? This much debated (and long since cancelled) project remains contentious. Enbridge’s proposed pipeline would have transported oil from Alberta to Kitimat, B.C., for export via tanker. In 2016, the Federal Court of Appeal overturned the Canadian government’s approval of the project, citing inadequate consultation with Indigenous peoples. The new Bill has caused concern among Indigenous communities, who are worried that the government could speed up approvals for infrastructure and energy projects and override legitimate protest.

Reflecting on the cancelled Northern Gateway and Energy East pipeline projects, an article in The Conversation about the case for building new pipelines argues: “On the one hand, any progress that mitigates the significant cost of US tariffs are likely dollars well spent. Building new pipelines strengthens the bargaining power of Canadian producers [...] On the other hand, if the US never follows through on tariffs on energy exports – or if future administrations do not share Trump’s affinity for chaotic trade policy – Canada could end up right back where it started when these projects were cancelled”. ^4.

In this issue of World Pipelines, we focus on construction best practice. Canada almost certainly needs to lay new pipe as part of its quest to lay down its future direction. As the nation seeks its own form of energy independence, it should make a deliberate effort to value legal due process, Indigenous sovereignty, economic foresight, and global climate alignment. Good infrastructure is sometimes built fast, but it is always fair, future-proof, and built well.

Elizabeth Corner
Senior Editor

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Editorial comment

Elizabeth CornerSenior Editor

Elizabeth Corner
Senior Editor