Egypt’s Emergence as a Regional Energy Hub
By Victoria Sainz | 26 November 2025
Egypt LNG Plants
Summary
Egypt is leveraging the Zohr gas field, LNG infrastructure, and regional cooperation to become a key Eastern Mediterranean energy hub.
Expanding LNG and green hydrogen capacity strengthens geopolitical influence, energy security, and economic growth, whilst requiring major infrastructure upgrades
Egypt is likely to gradually consolidate a hybrid LNG and green energy hub in the long term, though large-scale green-hydrogen exports remain uncertain.
Context
Over the past decade, Egypt has positioned itself as a key player in the Eastern Mediterranean energy landscape. An important turning point was the 2015 discovery of the Zohr gas field, which is estimated to be around 850 billion m3. Cairo has developed a regional energy hub by utilising that discovery together with its existing LNG infrastructure. Through the East Mediterranean Gas Forum (EMGF), the government has also improved diplomatic relations and invested in revitalising its liquefaction terminals, such as those at Idku and Damietta, which together reinforce Egypt’s role in coordinating and supplying regional gas flows.
This strategy supports Egypt’s goals: ensuring domestic energy security, attracting foreign investment, and increasing geopolitical influence. However, regional rivalry, fluctuating gas prices worldwide, and political unrest in nearby nations pose a threat to its ambitions. Egypt’s gas diplomacy is a significant economic opportunity and a delicate strategic balancing act at the same time that Europe looks for alternative suppliers and moves towards greener energy.
The government has invested heavily in expanding production capacity, reviving dormant export terminals, and fostering cooperation through platforms like the East Mediterranean Gas Forum (EMGF). Egypt’s strategy aims not only to ensure domestic energy security but also to attract foreign investment and increase geopolitical influence. However, regional competition, fluctuating energy prices, and political instability in neighbouring countries pose ongoing challenges.
Implications
Egypt has been expanding its LNG capacity and sustainable energy diversity, which has deep political, operational, strategic and economic implications. Politically, increasing LNG infrastructure and coupling it with a growing green-hydrogen strategy is likely to boost Cairo’s regional influence, as it can be a transit and export hub for natural gas. Domestically, Egypt’s National Low-Carbon Hydrogen Strategy signals a modern, forward-thinking economy and strengthens government legitimacy.
Operationally, the change towards sustainable energies necessitates a significant investment in infrastructure. In order to better assimilate renewable energy, Egypt is investing in digital storage technologies, enhancing grid resilience, and modernising its transmission and distribution networks. To accommodate both LNG esports and electrolysis-based hydrogen production, the logistics chain also needs to be modernised. This includes scaling up ports, pipelines, and storage.
Strategically, diversification into green hydrogen and LNG strengthens Egypt’s energy security by reducing dependency on imported fuel and optimising Egypt’s geographic positioning. Its goal of producing low-carbon hydrogen is in line with international markets, which increases its geopolitical weight. Egypt can use climate diplomacy and establish itself as a leader in growing green energy by aiming for 5-8% of the worldwide hydrogen market, as per its national strategy.
Economically, the change is expected to yield significant profits. More than 100,000 new jobs, a GDP increase of up to USD 18b, and substantial foreign investment are all predicted under the National Strategy. The American Chamber of Commerce claims that incentives like “Golden Licenses”, tax breaks, and advantageous port and land use conditions are meant to draw investors in renewable energy and green hydrogen. Additionally, the OECD analysis highlights Egypt’s enormous potential for renewable energy, particularly solar and wind in the Gulf of Suez and desert regions, providing competitive routes for the export of low-carbon power.
Michael Starkie/Unsplash
Forecast
Short-term (Now - 3 months)
Cairo is likely to prioritise covering summer electricity needs, securing spot LNG cargoes if needed, and maintaining basic terminal operations.
It is a realistic possibility that incremental regulatory incentives for renewable investors will also appear. Major structural changes remain unlikely within this window of time.
There is a possibility that the implementation of green hydrogen projects will continue. However, material construction activity and financing closures within three months are highly unlikely.
Medium-term (3-12 months)
Grid-reinforcement contracts, land allocation, and phase-one infrastructure work are likely.
LNG negotiations with European and Gulf actors are almost certain.
Significant expansion of LNG export activity is possible depending on domestic gas output from Zohr and tie-ins.
Long-term (>1 year)
On one hand, it is highly likely that Egypt consolidates a hybrid energy-hub role combining LNG and green-energy development. By this stage, infrastructure upgrades, EMGF cooperation, and green-hydrogen pilots support a reinforced regional position.
On the other hand, it is highly unlikely that Egypt will become a major green-hydrogen exporter to Europe. Prospects depend on financing, domestic electricity costs, and EU import frameworks. Potential remains high, but timelines are long and risks substantial.
