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Jan 9, 2013 | 17:54 GMT

Egypt's Natural Gas Quandary

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Egypt's Natural Gas Quandary

Rising demand for natural gas in Egypt is threatening the country's already delicate political and economic situation. Currently a net exporter of natural gas, Egypt may soon have to begin importing the commodity to offset its stagnating domestic production. Egypt's natural gas sector is relatively young; production began in 1975, but Egypt did not export natural gas until 2003. In 2010, Egypt had an estimated 1.7 trillion cubic meters of proven reserves, but those estimates have changed after further exploration. As of 2012, there were roughly 2.2 trillion cubic meters of proven reserves. But in 2009, production actually decreased slightly before plateauing. From 2009 to 2011 alone, domestic consumption of natural gas grew from 44 billion cubic meters per year to 51 billion cubic meters per year. Natural gas was especially encouraged in the electricity sector, which consumes more than 50 percent of all natural gas production. Electricity production in Egypt has nearly doubled since 2001, and since 2007, the electrical grid has been undergoing upgrades for increased capacity, much of which is geared toward using natural gas as a fuel supply. Subsidized natural gas and electricity have allowed for low prices and have encouraged consumption. But Egypt's population is also growing, and taken together, these factors have resulted in an ever-increasing demand for natural gas. In the near future, the country may not be able to produce what resources it has to adequately meet domestic demand and honor its export contracts.

Egypt's Natural Gas Quandary
1 Geo |  1 Topics 

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