The government has given the green light for a tender to import mazut shipments to operate power stations until regasification vessels are fully operational, to ensure continued electricity supply, a senior government source told EnterpriseAM.

The initial cost is expected to reach USD 1 bn to import mazut shipments that may reach up to 1 mn tons, with the possibility of using a deferred payment mechanism for additional shipments if the situation persists for a longer period and natural gas suppliers are further impacted, according to our source. To keep the lights on and factories running, the government wants to build a six-month strategic reserve of petroleum products to help cushion us from ongoing geopolitical tensions, our source added.

We’re also prioritizing the grid for our mazut and diesel supplies over energy intensive industries — think cement and fertilizers — an unnamed government source told Asharq Business. The two petroleum products will be diverted away from the factories for 14 days until incoming energy imports help fill the fap, saving around 8k tons of mazut a day and in turn helping raising total daily deliveries to power generation plants to 38k tons. Authorities have also suspended 900 mn cf/d of natural gas to energy-intensive industries and cut flows to steel producers to free up supply for the grid.

Industry is already feeling the pinch, with Abu Qir Fertilizers and embarking on an intensive maintenance plan for its plants until an improvement in operating conditions, it said in a EGX disclosure (pdf). Misr Fertilizer Production Company is also implementing an intensive maintenance plan for its factories “as a result of the repercussions of the war in the Middle East and the impact on natural gas supplies to the factories,” according to its own EGX disclosure (pdf).

Upping our shipments scheduled for summer is also part of the plan, with the government looking to increase its targeted spot LNG shipments through the summer from a previously targeted 60 shipments to 80, our source told us. This is in addition to recently secured agreements for 80–100 LNG shipments annually, with the option to ramp up to 120 cargoes per year if needed at a then USD 0.70 premium over international prices before the recent uptick in global oil energy prices.

Four of these additional LNG shipments should be arriving in the next two weeks, after the Egyptian Natural Gas Holding Company secured four additional shipments that will provide some 12 bn cubic feet of gas over a month at a rate of 400 mn cf/d, an unnamed government source told Al Arabiya Business.

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