Egypt To Get First LNG Cargo Next Month Amid Plans To Export Gas
Egypt, with Africa’s third-largest reserves of natural gas, plans to receive its first cargo of foreign liquefied fuel next month, a government official said.
The country is set to import at least 76 shipments of liquefied natural gas, or LNG, to help meet domestic needs until it can boost its own gas production and restore exports after halting them last year, said Hamdy Abdel Aziz, head of the Petroleum Ministry’s media department. He didn’t identify the supplier of the shipment due in March at a floating regasification terminal in Ain al-Sokhna on the Gulf of Suez.
“We expect that by 2020 we will stop importing gas,” Abdel Aziz said in a phone interview Monday from Cairo. “Depending on the needs of the local market and the diversity of its energy mix, we may resume exports after 2020 as major field development and exploration projects are under way.”
The North African country’s gas output peaked in 2009 at 647 billion cubic feet, according to the U.S. Energy Information Administration. Exports dropped as the Arab world’s most populous nation used more fuel in industries and homes and amid attacks on a gas pipeline to Israel and Jordan.
Egypt has signed 56 contracts for $12 billion in exploration investment since November 2013, according to the ministry. BP Plc, RWE AG, Dana Gas PJSC, Edison Spa and Total SA won licenses this year. State-run Egyptian Natural Gas Holding Co. is offering eight additional concessions in the Mediterranean Sea, the ministry said Sunday.
Second Terminal
The government has agreed to buy cargoes of LNG from Trafigura AG, Vitol SA, Noble Clean Fuels Ltd and Algeria’s Sonatrach, according to the ministry’s website. It’s also in talks for shipments from BP and Gazprom OAO.
The country will need to lease a second floating regasification terminal as imports increase, Abdel Aziz said. LNG is gas chilled to a liquid that tanker ships can transport to distant destinations not linked by pipelines.
Egypt has two LNG-exporting plants, with shipments from one of them, operated by Union Fenosa Gas, stopped since 2013. The other plant, run by BG Group Plc, declared force majeure in January 2014, citing “ongoing diversions” of its gas supply to the local market, according to BG’s website.
International companies began to invest again in Egypt to explore for and produce gas after receiving some of the overdue payments owed them for past production. The government halted the earlier payments amid political unrest that hurt official finances by curbing tourism and deterring investors.
The latest contracts awarded include drilling rights in the Nile Delta and Western Desert and in offshore areas of the Mediterranean and Gulf of Suez.
Source: Bloomberg
