A senior official in the Egyptian Natural Gas Holding Company (EGAS) revealed that gas supplies to Egypt Basic Industries Corporation (EBIC), a subsidiary of Orascom Construction, have been suspended since August.
The official said that gas supplies were halted because EBIC exports its ammonia production abroad in full and does not supply its products to the local market. The Ministry of Petroleum gives priority to fertiliser factories that sell their products on local markets, and does not subsidise factories that export the entirety of their products.
The official explained that EBIC’s contractual share of gas is estimated at 65m cubic feet per day.
He pointed out that EGAS has stopped pumping 70m cubic feet per day to Talkha Fertilizers since mid-October to enable the factory to undergo periodic maintenance.
He noted that about 470m cubic feet of gas are pumped daily to cement and fertiliser factories, representing 50% of their total actual needs for estimated at 920m cubic feet. The lack of sufficient gas supplies can be attributed to declining rates of production, he said.
There has also been an increase in gas pumped to cement factories at a rate no less than 15% of their needs. The increase occurred after consumption rates for power stations declined from 95m cubic metres per day to about 89m cubic metres.
The official mentioned that EGAS pumps about 330m cubic feet per day, representing 72% of fertiliser factories’ total needs, which amount to 510m cubic feet per day.
He explained that about 140m cubic feet are supplied to cement factories whose actual needs are estimated to be 410m cubic feet per day. The remaining quantity is made up for through quantities of fuel oil, he added.
He said that gas production rates in Egypt have declined to 4.7bn cubic feet per day, compared to 4.75bn last month as a result of natural declines in well productivity.