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Gas supply disruptions take a toll on fertilizer producers: Pressure fluctuations in the natural gas pipeline network have forced several companies in the fertilizer and petrochemical sector to suspend production until the gas flow stabilizes. Sidi Kerir Petrochemicals (Sidpec), Misr Fertilizers Production Company (Mopco), Abu Qir Fertilizers, Egyptian Chemical Industries (Kima), Egypt Kuwait Holding’s AlexFert, and EgyFert were among the companies impacted, the EGX-listed companies said in separate disclosures to the bourse yesterday.
How long are we talking? Mopco, Abu Qir, AlexFert, and EgyFert said they are putting production on hold for an initial 24 hours, while Sidpec and Kima said they are suspending production until the pressure levels stabilize.
Market reax: The news put fertlizer companies in the red during yesterday’s trading, with Abu Qir (4.9%), Sidpec (4.8%), and Egypt Kuwait Holding (3.7%) being the worst performers on the EGX30 yesterday.
ICYMI: The Oil Ministry reduced the natural gas supplies to energy-intensive fertilizer companies by 20-30% earlier this week. The cut supplies were redirected to feed power generators during a time of heightened demand.
Things are expected to go back to normal soon: The Oil and Electricity Ministries said they would gradually increase the gas supplies to fertilizer companies starting today.
Gov’t to ramp up LNG shipments to address the supply gap: The government plans to import between 15-18 shipments of LNG to cover the electricity needs of the industrial sector and households, a government source told Enterprise. It was reported in April that Egypt plans to import three LNG shipments a month between July and October, which could cost Egypt up to USD 120 mn a month.
Remember: Egyptians have been dealing with rolling blackouts since last summer, as the government works to ration the consumption of natural gas production. The power cuts were originally blamed on summer heat waves, but even after temperatures have fallen, officials noted that a daily one-hour cut saves the country some USD 300 mn per month.
