Petroleum and Mineral Resources Minister Sherif Ismail inaugurated on Thursday a natural gas pressure-reducing station that will supply the Hurghada Power Station, which was converted to work with natural gas instead of subsidised diesel, according to a statement from the ministry.
The project, which was carried out by Taqa Arabia Company, will operate with a 150 Megawatt capacity.
Expansion in the works of power stations operating with natural gas is one of the petroleum sector’s solutions aimed at rationalising spending on energy subsidies, Ismail said.
The Vice President of the Petroleum Products Division at the Federation of Egyptian Industries Mohamed Saad El-Din said that natural gas is better and cleaner, but not cheaper than diesel, when used at power stations.
Saad El-Din clarified that using natural gas as an alternative solution will help reduce expenditures on energy subsidies as Egypt does not import natural gas due to its widespread availability
Ismail was accompanied by Tourism Minister Hisham Zaazou, Executive Chairman of Taqa Arabia Khaled Abu Bakr and the Governor of the Red Sea General Ahmed Abdallah.
According to the statement EGP 2.2 billion are saved every year as a result of operating power stations with natural gas instead of diesel.
Ismail pointed out that reducing butane gas subsidies through the delivery of natural gas to 5.7 million residential units, saved the country EGP 8 billion.
Meanwhile, Abu Bakr stated that Taqa Arabia has distributed natural gas to 50 thousand residential units, 136 commercial customers, 26 hotels and two gas stations belonged to Gastec and Master Gas.
Abu Bakr disclosed that the future plan of his company in Hurghada aims to deliver natural gas to 10 thousand homes and commercial customers and 50 hotels.
In December, the Finance Ministry allotted EGP 225 million to the petroleum ministry in order to continue delivering natural gas to residential units. The total amount of the funding directed to this project has reached EGP 481 million, according to a statement from the ministry.
In October, cement factories reduced distribution and cut production by an average of 24% on the back of low and intermittent natural gas supplies.
Earlier in September, the government issued a decision requiring energy-intensive factories to meet a portion of their needs using solar and wind power. This decision came during a meeting held by the High Energy Committee attended by Prime Minister Hazem El-Beblawi.