Egypt’s LNG Comeback Is Set to Start in Cyprus

Egypt's gas sector is facing a domestic shortage, while Cyprus prepares to become a new gas producer. The Cronos project, set to deliver up to 2.8 million tonnes of LNG per year starting in 2028, offers a mutually beneficial solution. Cyprus gains an export route it couldn't afford alone, Egypt secures a supply for its increasingly constrained infrastructure, and Europe gains another non-Russian gas source.

Egypt's natural gas production has declined 7% from the previous year in the second quarter of 2026, continuing a downward trend since 2021's peak. This decline is more pronounced in the offshore Mediterranean, despite stronger production in Western Desert onshore fields. Meanwhile, domestic demand has surged, reaching 190 million m3/d in June, nearly matching Egypt's entire current domestic output.

To address this shortfall, Egypt has ramped up its LNG imports. Since mid-2024, four Floating Storage and Regasification Units (FSRUs) have provided about 20.2 million tonnes of LNG per year. However, only three FSRUs are currently operational, with one damaged by a drone strike in July, reducing Egypt's regasification capacity to 16.9 million tonnes per year. In August, Egypt received 18 US LNG cargoes and 1 Mexican cargo, totaling 1.2 million tonnes.

The Cronos project off Cyprus may alleviate Egypt's gas shortage. The Cyprus island nation has discovered six significant offshore gas fields but has yet to produce commercial gas. Its domestic market is small, relying heavily on imported petroleum, and lacks gas-processing or LNG-export facilities. The Cronos development, with its 14.2 million m3/d production potential, could provide a viable alternative.

However, it's not a guaranteed source for Egyptian consumers, as it's designed for LNG export and feedstock purposes. Nonetheless, Cronos could offer infrastructure for further gas exploration in Cyprus and contribute to the broader Eastern Mediterranean gas supply to Europe.