Libya, in a significant show of regional solidarity, has joined forces with Saudi Arabia to provide over $200 million in funding for liquefied natural gas (LNG) shipments to Egypt, according to well-informed sources in the gas sector in Egypt.
This crucial financial support comes as Egypt grapples with a severe energy crisis, exacerbated by a sharp decline in domestic gas production and a persistent foreign currency shortage that limits its ability to secure necessary energy imports.
Libya’s National Oil Corporation (NOC) played a pivotal role by financing a critical LNG shipment worth approximately $50 million in July. This contribution, alongside Saudi Arabia’s funding of three additional LNG shipments valued at around $150 million, has been instrumental in helping Egypt mitigate the risk of power outages during the peak summer demand period.
Without the support from Libya and Saudi Arabia, Egypt would have struggled to pay for the LNG imports required to meet its estimated $2 billion gas needs through October. The assistance provided by Libya underscores the strong strategic ties between the two nations, particularly at a time when Libya itself faces significant economic and political challenges.
While the details of Egypt’s gas procurement process remain confidential, with the Ministry of Petroleum declining to comment, the financial backing from Libya and Saudi Arabia represents a critical lifeline for Egypt. The country has had to implement electricity rationing measures to maintain grid stability amidst gas shortages, adding to the fiscal pressures already burdened by high subsidy costs and soaring external debt.
Libya’s decision to support Egypt during this crisis reflects a broader regional effort to maintain stability and strengthen economic ties. Despite its internal challenges, Libya’s contribution highlights its commitment to regional cooperation and the importance of solidarity among neighboring nations in times of need.
Egypt’s external debt has reached $154 billion as of May, nearing the all-time high of $168 billion recorded at the end of 2023. The financial strain from rising energy import costs has made support from Libya and other allies even more critical for Egypt’s economic stability.
Libya’s financial support in securing LNG for Egypt is a powerful example of how regional cooperation can play a vital role in addressing shared challenges. As Egypt continues to navigate its energy crisis, assistance from Libya and Saudi Arabia has been essential in preventing widespread power disruptions and maintaining social stability.
