Egypt set to receive 1st LNG cargo before summer: minister

Egypt, the Arab world’s most populous nation, is poised to get its first cargo of imported liquefied natural gas before summer to help meet rising demand as local production slumps, Oil Minister Sherif Ismail said, Bloomberg reported.

State-run Egyptian Natural Gas Holding Co is in the “final stage” of reviewing three offers for rental of a regasification unit that would permit LNG imports, he said yesterday in an interview in Cairo. The government aims “to secure a reasonable number of cargoes” this year, Ismail said, without giving further details.

“We are also looking at scheduling LNG imports for 2015 and 2016 for a period between three and five years because we believe that Egypt has big proven and potential natural-gas reserves,” the minister said. “So we will be only needing that imported gas until we bridge the gap between production and consumption.”

Local energy exploration and production slowed in the three years since an uprising toppled Hosni Mubarak from the presidency. Debts to foreign oil companies increased to $4.8bn by the end of 2013, according to Ismail.

Egypt is producing 5.1bn cu ft of natural gas daily, the minister said. That compares with 6.4bn cu ft in 2010. Output will expand to 5.8bn cu ft a day with additions from new and existing fields, he said. “We are focusing on all the fields and wells that we could put on stream this year and expedite production from others that are already producing,” Ismail said.

The government is considering importing Iraqi natural gas through a pipeline used by Egypt to deliver the fuel to Jordan, he said. It is also in talks with Reading, England-based BG Group over gas supplies after the company declared force majeure on its Egyptian LNG exports, according to the minister.

Force majeure is a legal clause freeing companies from contract terms because of circumstances beyond their control. BG, which gets about 18% of its production from Egypt, made the declaration on January 27 after gas was diverted to the domestic market from export terminals.