In response to a request submitted by Egyptian manufacturers to decrease the selling price of gas, a source from the Egyptian Natural Gas Holding Company (EGAS) stated that the current cost of suppling gas to the industrial market averages $7 per unit, and as a result EGAS is unable to recover its cost of production and importation, since current selling rates do not cover the company’s unit costs. Therefore the company cannot endorse any reduction to selling prices or amend contracts with manufactures to USD instead of EGP, reported Al Borsa News.
He added that EGAS is continuing talks with over 90 manufactures on rescheduling their debt. The outstanding amounts owed to EGAS has reached EGP 14b, of which EGP 9b is owed by the government’s industrial sector.
In related news, the Egyptian Minister of Petroleum, Tarek El Molla, said that Egypt aims to increase natural gas production to more than 7.5bcf/d by 2020/2021, reported by Hellenic Shipping News.
Once an energy exporter, Egypt has turned into a net importer because of declining oil and gas production and increasing consumption. It is trying to speed up production at recent discoveries to fill its energy gap and become more self-sufficient.