The Egyptian Ministry of Petroleum announced on Thursday that the country’s Natural Gas Holding Company (EGAS) has finalized an agreement with Norway’s Hoegh LNG to lease the Hoegh Galleon floating unit for liquefied natural gas (LNG).

The ministry stated that the unit will be rented for storage and regasification to ensure additional domestic consumption during the summer months.

According to Hoegh LNG, the unit will be leased for an interim period from June 2024 to February 2026 and stationed in Ain Sokhna on the Red Sea. The aim of the agreement is to bolster energy security in Egypt, the company said.

Egypt is anticipated to increase LNG imports during the summer to meet high demand, following a series of power outages last summer. Reuters reported that the government purchased at least two LNG cargoes in April and is expected to acquire up to 20 more over the spring and summer to prepare for rising power demand.

This shift to imports marks a reversal for Egypt, which has been a natural gas exporter in recent years. With a population of about 106 million people, Egypt faces growing gas demand and aims to become a regional gas supplier. However, apart from the giant Zohr field discovered in 2015, there have been no other major discoveries.

Data from the Joint Organizations Data Initiative (JODI) revealed that in 2023, Egypt's total natural gas production decreased by 11.5 percent annually to approximately 59.29 billion cubic meters, the lowest level since 2017.