Egypt hopes to halt liquefied natural gas imports in 2020, Oil Minister Sherif Ismail said on Monday, as projects to develop its own gas fields are completed.
The Arab world’s most populous nation is struggling to cope with energy demand from a population of 85 million. Demand now outstrips production of oil and gas from fields in the Western Desert, Nile Delta and offshore.
Ismail told Reuters in an interview that “we are targeting to stop importing gas with … the completion of developing gas field projects.”
He added the caveat that this would be as long as there was no need to meet additional demand with imports.
Egypt announced this year contracts for LNG imports with Vitol, Noble Group, and BP, part of tender to provide 75 LNG cargoes, which Ismail reiterated would cover demand for two years.
He said he expected a floating terminal needed to import LNG to arrive by March and that a second one was expected to arrive by July.
“Egypt’s gas production is 4.7 billion cubic feet a day and we need no less than 700 million cubic feet extra per day to meet the country’s electricity needs during the summer, in addition to the gas needs of the industrial sector,” Ismail said.
Egypt is nearing a deal with Algeria’s state-run Sonatrach for supply of LNG from 2016 until 2020, after agreeing to buy six cargoes from Sonatrach delivering this year.
Cash and oil products worth $10.6 billion arrived from the Gulf in 2013-2014, bolstering the economy and giving Cairo space to reform a subsidy system that has turned it from an energy exporter into a net importer in recent years.
Ismail said Kuwait had recently agreed to provide Egypt with about 3 million barrels of oil per month, up from 2 million barrels.
He also said that the expected subsidy bill for fuel products in the fiscal year 2015-2016 year would amount to about 86 billion Egyptian pounds ($11.27 billion) based on an estimated Brent oil price of $75 per barrel.
Ismail also said the ministry planned to announce an international tender for gas exploration in the Mediterranean on Tuesday, with bids expected to close by the end of June.
It also planned to issue a new tender for oil exploration in the Western desert in 2015.
Ismail said production had started from eight wells in Block 9A, which is being developed by British gas company BG off the Alexandria coast.
Source: Reuters
Photo: Reuters
