Egypt is holding talks with its LNG suppliers to defer contracted shipments this year. The North African Country aims to cut back on purchases in 2018, as surging domestic gas production squeezes out demand for costly foreign imports, according to Reuters .
Moreover, the Egyptian Natural Gas Holding Company (EGAS) aims to defer dozens of LNG cargoes due this year, analyst, trade and industry sources say. It is also scaling back LNG purchase plans for 2018 from 70 cargoes to as low as 30 cargoes, signaling the withdrawal of one of the fastest-growing LNG importers from the global stage.
The scale and speed of Egypt’s turnaround suggests the government may yet wean itself off foreign gas but how sustainable that turns to be will depend on domestic pent-up demand.
“Natural gas demand in Egypt has been constrained from power generation to fertilizer production so gas demand could potentially rebound much more than initially anticipated,” Anne-Sophie Corbeau, research fellow at the King Abdullah Petroleum Studies and Research Centre said.
“The appetite for LNG in that region is going to be challenged but will not disappear”, Corbeau added.