Our LNG imports may extend to Winter: The Egyptian General Petroleum Corporation (EGPC) has issued a tender for 17 shipments of liquified natural gas for its floating import terminal at Ain Sokhna, as well as 3 more cargoes for delivery to Jordan’s Aqaba, in one of the state-owned firm’s largest ever tenders, a government source told Enterprise. The 20 shipments are expected to be delivered from October through December, with the tender set to close on 12 September.

And it looks like they will continue after this: “We will need to import another 17-20 shipments in 1Q 2025,” the source added.

We weren’t expecting LNG imports to continue for such a long time: The government originally laid out a USD 1.2 bn plan to import fuel to power energy plants to bridge the supply gap until the end of summer, and made orders to import around 21 shipments of LNG with the assumption that demand will decline during winter and there will be no need to import until the weather starts heating up again next year.

Remember: Power cuts are set to return next week after an eight-week hiatus, before ending for good by the end of the year.

Imports at this time are rather uncommon for Egypt: “Egypt has really been the surprise on the global LNG market,” Columbia University researcher Anne-Sophie Corbeau told Bloomberg. “The production has totally collapsed. This is the problem, and there is no way around that: either you reduce demand or you increase net imports.” Egypt’s extended demand for LNG caused a rise in European natural gas prices, which rose as much as 4% on Friday, the business news service added.

The move isn’t just about filling a supply gap: The government apparently resorted to this solution to avoid two potential problems:

  • Any possible arbitration claims from liquefaction plant operators: The government will direct more of the local gas production to the two liquefaction plants in Idku and Damietta, while directing more LNG imports for local consumption. This should help avoid any possible arbitration claims by the liquefaction plants’ operators after the quantities of gas supplied to them declined recently.
  • Keeping foreign energy players happy so the investments keep coming in: The government will direct more domestic natural gas production to export and will allocate the export proceeds to international oil companies as part of the government’s efforts to encourage new foreign investments and pay arrears owed to the foreign companies.

On the topic of restarting LNG exports: The government is planning to resume gas supplies to its Idku plant as early as 4Q 2024, Asharq Business reports, citing a source from Shell — a shareholder in the Idku plant. The government is looking to supply Egyptian LNG (a joint venture between EGAS, EGPC, Shell, and Petronas) with some 7.2 mn metric tons of natural gas annually, the source added.

The country still has a long-term objective to become a net LNG exporter once again: The government does not want to resort to long-term contracts despite the current favorable prices amid hopes of new natural gas discoveries that could put Egypt once again to the global export map, along with expanding renewable capacities, the source explained.

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