Egypt negotiates with state-owned foreign companies to supply LNG requirements

Mohamed Adel
3 Min Read
EGAS has completed the technical and financial evaluation of the offers from companies applying for the tender to supply the second gasification ship (AFP photo)

The Egyptian government is negotiating with states that have signed joint-cooperation agreements with Egypt and own liquefied natural gas (LNG) companies in order to supply Egypt’s requirements of LNG for two years, subject to renewal.

Negotiations are ongoing with two Russian companies Rosneft and Gazprom, Algerian company Sonatrach, and Chinese PetroChina, in addition to an Omani company, a governmental source told Daily News Egypt. The negotiations are regarding contracts for a two-year period in order to supply the country’s needs of LNG.

The source added that the Ministry of Petroleum is negotiating with foreign state-owned companies with which Egypt signed joint-cooperation agreements. This is with the hopes of obtaining lower prices for gas shipments, rather than dealing with merchants who add commission to the cost of shipments.

The Petroleum Ministry has requested from the International Cooperation Ministry a list of the countries with which joint-cooperation agreements were signed, in order to negotiate with their local companies about supplying gas shipments at the new prices, as the signing would just involve the two governments without merchants’ brokerage.

Trafigura, Shell, Rosneft, and PetroChina won the tender to supply 11 gas shipments to Egypt, a process that began in June and is expected to continue until the end of August.

The source said that Trafigura won the tender to supply five LNG shipments to Egypt, as well as Shell, with three shipments to be provided within three months.

Russian company Rosneft won the tender to supply two LNG shipments, and PetroChina will supply one LNG shipment in order to meet the local market requirements over the summer, the source added.

He explained that Sonatrach’s offer in the tender to supply 11 LNG shipments was rejected because it included higher prices compared to other competitors.

Following contracting on the third gasification ship and starting its operation in the second quarter of 2017, the total imported energy will reach nearly 1.95bn cubic feet of gas per day, instead of 1.2bn cubic feet currently imported through two gasification ships in the Ain Sokhna port, the source concluded.


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