The Egyptian government told Union Fenosa, the Spanish-Italian company involved in the liquefaction of natural gas, to consider importing gas from abroad to meet the needs of the Damietta liquefaction unit located on the Egyptian Mediterranean coast, after the company suffered from a set back in its supplies from the gas national network during the first half of the fiscal year 2009/2010.

The firm currently receives 320 million cubic feet of gas per day, a sum of the 70% of the daily amount agreed upon with the Egyptian Natural Gas Holding Company (EGAS).

SEGAS LNG the liquefied natural gas complex in Damietta production is exported mainly to the Spanish market via a new receiving terminal at Sagunto, the output capacity of the plant is five million tons of LNG per year and 3.2 of it goes to Union Fenosa Gas and the rest of the LNG is sold by EGAS.

“There’s a shortfall in the gas quantities due to vital changes in the market,” said an official at SEGAS.

He suggested that it might be related to the recent policies of EGAS of giving the priority to the local demand, but did not mention any further details.

“We need first to supply the local market, and it might affect the exported amount of gas,” explained Mahmoud Latif, Chairman of EGAS.

Latif added that the sector’s main concern now is to provide the electricity and industrial sectors with the needed gas for power supply, according to the signed contracts between the petroleum sector and these two divisions.

He refused to comment on the statements made by Eng. Sameh Fahmy around some Arabian companies offering to exchange Iraqi gas through the Arab gas pipeline and transfer it into Egypt to use it in investment projects planned by these companies or to export this liquefied Iraqi gas through the Egyptian lands to America and Europe.

The LNG complex is operated by SEGAS, which is controlled by Union Fenosa Gas, a joint venture of Union Fenosa and Eni.

Union Fenosa Gas owns 80% of SEGAS shares. Minor share holders are Egyptian Natural Gas Holding Company (EGAS – 10%) and Egyptian General Petroleum Corporation (EGPC – 10%). The plant is supplied by natural gas from the West Delta Deep Marine (WDDM) Concession Area about 140 kilometers (90 mi) from the LNG complex.