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Egypt’s nat. gas supply chain infrastructure to get a boost in 2027: Egypt’s first onshore regasification unit will begin operating in August 2027 at a cost of USD 200 mn, a government source told EnterpriseAM. The unit will be set up at the idle Idku liquefaction facility in partnership with Shell and Petronas.
BACKGROUND- We first heard about the project in May — at the time it was said that the plant will have an initial capacity of around 750k cubic meters per day, which will increase to 1 mn cubic meters per day at a later stage.
Why does Egypt need it? The plant will help cut down on the cost of importing energy and will reduce the country’s reliance on leased regasification units. Egypt will have four regasification vessels leased by the end of 2026, with a combined capacity of 3 bn cubic feet per day, to help meet rising energy demand — the cost of leasing a regasification unit exceeds USD 200 mn a year, making it more feasible to set up a permanent facility.
Who owns what: Shell and Petronas together control about 71% of Idku and hold operating rights under a 25-year contract expiring in 2029. The government — represented by EGPC and EGAS — holds 24%, while France’s Engie owns the remaining 5%.
The state plans to take over sooner than expected: Shell and Petronas will receive utilization fees for two years after the plant is up and running in exchange for their stakes in the facility, after which full operating rights for both the Idku plant and the new regas unit will revert to the Egyptian state, the source added.
A change in Idku’s function: The plant had been used to liquefy gas for exports since it came online back in 2005, but operations halted due to a shortage of feed gas.
Still a liquefaction plant, for now: Shell and Petronas recently exported an LNG cargo from the Idku liquefaction plant and have a second shipment slated for next month, a government source told us. The Madbouly government believes the move to resume LNG exports will encourage international firms to increase their investment in the sector.
SOUND SMART- Regasification warms imported LNG from its super-cooled liquid form into a gaseous state, which can then be fed directly into the grid for domestic use. Liquefaction does the opposite, cooling natural gas to shrink it into liquid form (LNG) for storage and export.
