The winds of war on the northern border are increasing, and there are strong fears of damage to Israel’s strategic infrastructure. One of the prominent targets expected to be hit by Hezbollah’s rockets, missiles, and UAVs are the gas rigs. Unlike other critical infrastructures, if the rigs shut down, it would not just harm Israel but also Egypt. Egypt has been increasing its gas imports from Israel since 2020. Last year, Egypt imported 8.6 BCM of Israeli gas, with Israel consuming 13.1 BCM, and the remaining 2.9 BCM going to Jordan.
Egypt is facing a severe shortage of electricity, with gas production reaching a six-year low in 2023 due to poor activity in its natural gas field. The Zohar natural gas field, located in Egypt’s economic waters, has seen a significant decrease in proven reserves, from approximately 1,000 BCM to around 350 BCM. Issues with sulfur saturation and corrosiveness have damaged the production infrastructure, leading to a reduction in gas production.
If an all-out war breaks out between Israel and Hezbollah, it is likely that there will be a complete halt in gas production from the Israeli fields to protect them from potential missile attacks. This could have serious implications for Egypt as well, as it heavily relies on gas imports from Israel to meet its energy needs. The shortage of gas in Egypt has already led to frequent power outages, affecting the everyday lives of its citizens.
The Egyptian government has implemented various measures to address the electricity shortage, including daily electricity allowance plans and power outages. However, these measures have not been sufficient to meet the growing energy demand in the country. In the event of a complete halt in gas exports from Israel, Egypt would face significant economic challenges, potentially impacting key sectors such as petrochemical and textile industries.
Overall, the escalating tensions in the region pose a serious threat to the energy security of both Israel and Egypt. The potential impact of a disruption in gas supplies highlights the interconnectedness of the two countries’ economies and the need for strategic planning to mitigate risks associated with conflicts in the region.