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Egypt to provide tender for a minimum of 15 LNG cargoes to cover summertime demand - sources say

Egypt prepares to release a buy tender looking for 1520 freights of melted natural gas (LNG) to cover heavy summertime need that had actually led to a wave of rolling blackouts and forced short-term shutdowns of chemical and fertilizers plants, 4 industry sources informed .

The most populous Arab country has actually returned to being a web importer of gas, reversing its position as an exporter in the last few years as part of a plan to end up being a trustworthy provider to Europe.

Gas supplies that help Egypt generate electrical energy have been decreasing at a time when a growing population of 106 million and metropolitan advancement have been pushing up power demand while high cooling demand during summer season increases power consumption.

The tender is anticipated in the 2nd half of June or early July to cover demand for the summertime season between July and October, one source stated.

Another source stated the announcement is pending an energy minister visit, as President Abdel Fattah al-Sisi purchased the prime minister to form a new cabinet previously this week.

Egypt's petroleum ministry did not immediately react to a. ask for remark.

Egypt had actually not imported LNG considering that late 2018, with just 4. locally produced freights received at its no longer. readily available FSRU over the 2019-2023 period, in addition to an imported. partial freight that was re-exported in late 2023, according to. S&P Global Product Insights information.

It has actually purchased 4 cargoes from the spot market this year,. and had to pay a high premium, partially due to looking for timely. deliveries.

2 of the cargoes, bought for April and May shipment, were. bought at a $1.3-$ 1.7 per million British thermal system (mmBtu). premium to the gas rate at the Dutch TTF hub, S&P data revealed.

The market has actually been anticipating this in terms of total. volumes. We have actually seen Italian, Greek and Turkish provided prices. increasing against TTF and Northwest Europe provided prices,. mostly due to the fact that of Egyptian demand and the requirement for other. Mediterranean purchasers to contend, stated Samuel Good, head of LNG. rates at product prices firm Argus.

In May, Egypt's Natural Gas Holding Business (EGAS) struck an. agreement with Norway's Hoegh LNG to lease the Hoegh Galleon. floating storage and regasification system (FSRU) from June 2024. to February 2026, to support energy security.

A number of Egyptian chemical and fertilizers companies have. closed down their factories on a short-term basis, mentioning increased. consumption-driven pressures on the natural gas network leading. to changes in the grid.

Gas materials will gradually resume streaming as of Thursday to. fertilizer factories, the petroleum ministry stated.

In 2023, Egypt's total gas production fell to its. lowest considering that 2017, figures from the Joint Organisations Data. Initiative (JODI) show.

Gas production in 2023 was around 59.29 billion cubic meters. ( bcm), falling 11.5% year-on-year to the most affordable production level. given that 2017, when it was around 50.72 bcm.

Arranged power blackouts have actually stayed in place because, coming. as a shock to Egyptians accustomed to years of reputable power. supplies under President Sisi.