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Negotiations fail between EGAS and Shell over gas supply for next summer’s electricity

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Sources revealed that EGAS negotiated with Shell and other companies to import between 500 and 750 million ft3of gas per day to cover the electricity power stations’ needs.

Negotiations between the Holding Company for Gases (EGAS) and Shell have failed to reach an agreement on the supply of gas required for electricity stations for next summer. (AFP Photo)

Negotiations between the Holding Company for Gases (EGAS) and Shell have failed to reach an agreement on the supply of gas required for electricity stations for next summer.
(AFP Photo)

Negotiations between the Holding Company for Gases (EGAS) and Shell have failed to reach an agreement on the supply of gas required for electricity stations for next summer.

According to Al-Borsa newspaper, Shell excluded the possibility of a “current agreement” since most of the next year’s international agreements have been already concluded.

Sources revealed that EGAS negotiated with Shell and other companies to import between 500 and 750 million ft3of gas per day to cover the electricity power stations’ needs.

Sources asserted that EGAS “has only one choice to supply the electricity stations’ needed gas for next summer, through dividing the imported quantities required over several petroleum companies, which would be easier to access and negotiate with states.”

They added that EGAS had “a great delay” in preparing for importing next summer’s gas.

EGAS had previously decided not to offer new auctions for the private sector to import gas for electricity power stations, and to merely depend on a limited agreement with Shell, the winner of the auction offered earlier this year.

Last October, EGAS decided to offer an auction for the establishment of a station for transforming imported liquefied gas into a gaseous form, which would enable the Egyptian government to import gas to supply the domestic market. EGAS is currently studying proposals from four companies proposed offers for this station: Golar, Accelerate, Citadel and another Norwegian company.

In a related context, a source in EGAS revealed that fuel needs for electricity power stations would reach 130 million m3 of gas and EQ per day, and that the Ministry of Petroleum can afford no more than 110 million m3 of gas and EQ. This is based on SHELL’s inability to import gas for next summer.

The source added that the Edco liquefaction plant, with a share of 350 million ft3, has reduced its daily rates by 150 million m3 due to Petrowheel’s and Rashid’s decrease in production rates caused by the bad weather conditions that resulted in pressuring stations’ technical problems.

He went on to highlight that “our production of gas reached 5 billion ft3 per day due to the reduction of 175 million ft3 from Petrowheel and 25 million ft3 from Rashid’s concessions,” assuring that normal production of 5.2 billion ft3 would resume immediately.


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