Egypt has signed a deal with Norway’s Hoegh to supply a floating terminal needed to import liquefied natural gas, the oil ministry said on Monday, marking a step toward securing badly needed gas for power generation and industry.
The contract for the Floating Storage and Regasification Unit (FSRU) will last for five years, the ministry said in a statement.
Hoegh Chief Executive Sveinung Stoehle told Reuters that the company “will send out an announcement about this shortly.”
The ministry said the terminal would be moored off of the Red Sea port of Ain Sokhna from September 1. It said the platform has a storage capacity of 170,000 cubic metres and was undergoing final testing in South Korea.
Egypt had hoped to secure the terminal in time to be able to import gas to stave off the current energy crunch, but experts say that a terminal could not be installed before next year given the limited supply available worldwide.
Egypt can export LNG but cannot import it without the terminal. Gas is in short supply due to declining domestic gas production, forcing the government to cut into LNG earmarked for export.
The tender process to find a company to provide the terminal began around 18 months ago, well before the army toppled Islamist President Mohamed Morsi last July.
Reuters reported in February that Hoegh had pulled out of the deal, citing sources with knowledge of the talks between Cairo and the company.