The Egyptian General Petroleum Corporation (EGPC) will cover fees for importing liquefied natural gas (LNG) and renting the gas vessel until the end of the current fiscal year (FY).
EGPC President Tarek El Molla announced the company will cover LNG import fees according to values allocated in the state budget. It will be settled with the Ministry of Finance in its final accounts for FY 2014/2015.
The Ministry of Petroleum faced a financing crisis for LNG shipments for the coming year due to the Ministry of Finance’s refusal to provide the necessary financial liquidity. This came despite allocations worth approximately EGP5bn in the FY 2014/2015 budget.
EGAS Chairman Khaled Abdel Badie signed a final contract with Hoegh LNG Chairman Sveinung Stoehle for the first regassification vessel to receive and store LNG shipments. The ship will also return the supplies to their gaseous state, and transport the gas to the national LNG network.
The rent contract stipulates that for five years, the vessel will provide quantities of LNG exceeding 500m cubic feet per day to fulfil part of the additional requirements of power plants.
The final signing of the contract comes after Norway’s Hoegh LNG was awarded a tender offered by Egygas for which Malaysian, American, and Dutch companies competed.
Stoehle added that the regassification vessel has modern, sophisticated technology. It left the Hyundai Heavy Industries Corporation shipyard on 2 November, and is planned to become operational in the Port of Ain Sokhna by March.
He also said that all parties agreed to exert the efforts required expedite operation for the vessel prior to this date.
Abdel Badie explained that the seven offers received by EGAS for the global tender for importing LNG shipments was closed at the end of October, with bids currently being evaluated. The tender will be awarded before the end of November, he said.
He pointed out that an initial agreement has been made with Algeria’s SONATRACH and Russia’s Gazprom to each supply seven shipments of LNG, and final procedures are being taken to receive the shipments.