Egypt Requires $2.5 billion For Gas Import - Africa’s premier report on the oil, gas and energy landscape.

Egypt Requires $2.5 billion For Gas Import

Norway’s Höegh to supply LNG Terminal, Russia’s Gazprom and France’s EDF to provide gas
By Mohammed Jetutu, North Africa Bureau Chief

Egypt, until recently a net exporter of natural gas, now requires $2.5 billion to cover the import requirements for the resource for two and half years.

The figure covers the cost of the shipments, the rental cost of a dock at Ain Sokhna Port and the rental of a floating facility to receive LNG and convert it into gas at the port, between August 2014 and December 2016, according to   Ahmed Abdel Samie, head of the state gas company Egyptian Natural Gas Holding Company (EGAS).

EGAS has inked a Letter of Intent (LOI) with the Norwegian company Höegh LNG, for the charter of one of Höegh’s Floating Storage and Regasification Units (FSRU), which will act as an LNG import terminal in the port of Ain Sokhna, located on the Red Sea’s Gulf of Suez. The designated vessel Höegh Gallant, is one of four of Höegh’s LNG newbuilds currently under construction at Hyundai Heavy Industries (HHI) in South Korea.

The FSRU will be moored at a jetty and Höegh LNG will supply the topsides, according to the website LNG Industry. “The LOI is for a five-year contract”, the website says. “The FSRU is scheduled to start operations in the third quarter of 2014. The LOI is subject to board approval from both companies and endorsement from Egyptian regulators”.

Egyptian daily Al Masry Al Youm reports that Egypt has concluded deals with Russian producer France’s EDF to supply 12 natural gas shipments by August 2014.  The country is also negotiating similar deals with Sonatrach of Algeria.  “The Ministry of Petroleum expects natural gas production in 2014/2015 to reach 5.4 billion cubic feet per day with consumption to reach 5.57 billion cubic feet and that compares with 5.31 billion cubic feet/day production in 2013/2014 compared with consumption estimated at 4.95 billion cubic feet/day/”, Al Masry Al Youm explains.

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