Ministry of Petroleum negotiates supply of 12 LNG shipments with foreign companies

Mohamed Adel
3 Min Read
The eighth shipment of liquefied natural gas (LNG) arrived on Saturday in Ain Sokhna Port and was received on a Norwegian gasification ship from Höegh to be converted to gas and pumped to the national grid. (AFP Photo)

The Ministry of Petroleum and Mineral Resources is negotiating with foreign companies to cover the domestic market’s fuel needs. The ministry previously signed contracts with these companies to import 12 additional shipments of liquefied natural gas (LNG) in July by the end of 2016.

Minister of Petroleum and Mineral Resources Tarek El Molla told Daily News Egypt that they are negotiating with the companies to supply two additional shipments of LNG monthly during the second half of 2016.

He pointed out that they increased the amount of imported gas to roughly 1.2bn cubic feet per day during the summer season, so as not to cut gas off the industrial sectors, given the rising electricity consumption.

He noted that the Egyptian Natural Gas Holding Company (EGAS) signed contracts to import 80 LNG shipments, worth between $2.5bn and $3bn, during 2016. These should supply the industrial sector and power plants consumption. The capacity of two gasification ships reaches 1.2bn cubic feet per day.

He explained that the gas containers that are planned to be imported were agreed upon as a result of the tender announced by EGAS last year. The shipments are from Algeria’s Sonatrach, Russia’s Gazprom, Switzerland’s Vitol Swiss, and a number of global gas trade companies.

The imported gas bills are estimated at $300m monthly and supply the domestic market with 1.2bn cubic feet.

A port has been prepared and equipped to receive the LNG shipments, and is linked with the national gas grid. The first gasification unit started its operations in April 2015, with a capacity of 500m cubic feet per day. The second unit started in September 2015 with a capacity of 750m cubic feet per day.

Contracts to build a third pier had also been signed, and an outline was prepared regarding the operation of the third gasification unit during the second quarter (Q2) of 2017. This expanded the total import capacity, reaching 2bn cubic feet per day.

Two projects have started their first phases of operation to contribute to the gas production grid. The North Alexandria project produces 700m cubic feet a day, while the Zohr project provides 900m cubic feet daily. Despite their addition to the grid, Egypt will continue to import gas at the same levels as before.

 

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