The Ministry of Petroleum has assigned importing the liquefied natural gas (LNG) needed for power plants during fiscal year (FY) 2015/2016 to the Egyptian General Petroleum Corporation (EGPC). The corporation would pay for the imported gas from its own resources.

The EGPC budget will include around $2.5 billion to import LNG shipments, as well as paying for regasification ship, according to Tarek El-Mulla, Chairman of EGPC.

El-Mulla assured that no Ministry of Finance budget will be allocated to import gas. The value of importing gas shipments, estimated at around $2.5 billion annually, will be liquidated, as well as a bill for oil product subsidies allocated in the state budget by the end of the year with the Ministry of Finance.

El-Mulla added that the cost of renting regasification ships to receive the imports is estimated to be approximately $60 million annually. This works out at approximately $ 5 million on a monthly basis, apart from the price of the LNG shipments.

EGAS has already agreed with Norwegian oil company HOG on renting a regasification ship at an exchange rate of 31 cents for each 1m thermal units. The agreement stipulated that around 500m cubic feet of gas would be converted daily.

Last October, Egypt proposed a tender to import LNG, with four international companies including British Petroleum (BP) and multinational Vitol winning the tender. This would provide around 40 shipments of LNG annually, starting from next March.

An initial agreement with Russian Gazprom was reached to import 35 shipments of LNG over the next five years, in addition to six shipments from Algerian Sonatrach during 2015, according to Minister of Petroleum, Sherif Ismail.

Gazprom also will import approximately seven shipments of LNG annually, starting from this year until 2020.

Source: Daily News Egypt