The Madbouly government is looking to liberalize the natural gas market, by allowing multiple suppliers to make direct sales to private-sector customers, a government source told EnterpriseAM. The new system would give large industrial players the option to secure their gas needs through direct contracts with suppliers if they can land better prices or terms, we were told.

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The move will support Egypt’s efforts to one day become a regional energy hub, the source argued. Creating a market where private-sector suppliers — both local and foreign — sell directly to end users will develop the logistical, financial, and also bureaucratic networks to facilitate the government’s long-planned return to being an energy exporter — and a leading regional hub at that.

The decision is also being presented as a W for the budget, with the introduction of private suppliers creating price flexibility and helping reduce the strain on the state budget, the source said. At present, Egypt still heavily subsidizes gas for industries, particularly energy-intensive ones, at prices well below global levels.

REMEMBER- The government raised natural gas prices for factories starting 15 September, according to a statement from the Industry Ministry.

Regulatory changes are also in the pipeline for the gas market to drum up foreign investments, the source added without expanding further. The move coincides with the Oil Ministry targeting USD 4 bn in exploration commitments this fiscal year from an upcoming tender for 12 concessions, which includes a hoped for return to Red Sea exploration and production.

The state is confident in an uptick in local gas production, but LNG imports will continue until 2030. Upcoming discoveries are expected to lift reserves and domestic output, helping Egypt cover its local demand, though the country will continue importing gas until 2030 under medium-term contracts signed with foreign suppliers, our source told us.

Pharaonic Petroleum Company thinks it may have struck (black) gold, with the recent results from a seismic survey indicating a reservoir with 1.5 tn cf of gas, our source told us. Work is ongoing to analyze the data ahead of drilling a deep exploratory well. The company also plans new development work, including recompleting the Tort-6 well and drilling the Osiris-3 well, which together are expected to add some 100 mn cubic feet of gas per day and 3.9k barrels per day of condensates to the national grid.

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