Mild Weather in Egypt Could Ease LNG Demand, Boost Supplies for Europe

An unseasonably mild start to summer in Egypt is expected to curb domestic demand for liquefied natural gas (LNG), potentially freeing up more supplies for Europe as it enters its critical summer stockpiling season, Bloomberg reports.

Data from Atmospheric G2 indicates that average temperatures in Egypt are forecast to dip 4 degrees Celsius below normal later this week. This cooler weather is projected to reduce cooling degree days – a key indicator of energy demand – by nearly one-third in the first three weeks of April compared to the same period in 2024.

The European Centre for Medium-Range Weather Forecasts estimates that Egypt will record 72 cooling degree days through April 22 this year, significantly lower than the 10-year average and the 102 days recorded during the same period last year. Cooling degree days measure how much a day’s average temperature exceeds 18 degrees Celsius and are used to forecast energy demand for cooling.

Egypt, which transitioned from a net exporter to a major importer of LNG last year due to declining domestic gas production and surging demand, relies heavily on the fuel to meet its energy needs, particularly during the hot summer months. Blackouts became commonplace in the country last year due to these shortages.

The shift to milder weather is attributed to a southerly jet stream, a high-pressure system, and other atmospheric conditions that have created a “potent cold northerly flow” of Arctic air, according to MetDesk meteorologist Matt Dobson.

The reduced demand from Egypt is expected to loosen the global LNG market, which is already experiencing weaker consumption in Asia, allowing Europe to secure more cargoes to replenish its depleted storage sites.

While the milder weather and lower demand recently allowed for a brief resumption of gas flows to Egypt’s two LNG export plants, analysts believe this will be short-lived as the country will still need to import LNG throughout the summer. Egypt has been investing in infrastructure upgrades and plans to lease additional floating import terminals to ensure sufficient supplies.

In 2024, Egyptian Natural Gas Holding Co. issued large spot LNG purchase tenders, contributing to price increases.