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Egypt intends to purchase 7.79 million tonnes of liquefied natural gas for $3.55 billion

In North Africa, Egypt’s planning ministry revealed that the country is estimated to import 28.6 million tonnes of crude oil, liquefied natural gas and various other oil products, which accumulates to the value of $16 billion (ZAR203 billion) in the 2015/16 fiscal year, Reuters reported.

Oil and liquefied natural gas imports

The ministry’s economic development strategy for the current fiscal year, which rolled out on 1 July, highlighted that the state intends to purchase 7.79 million tonnes of liquefied natural gas for $3.55 billion (ZAR51 billion).

In addition, the government plans to purchase 6.37 million tonnes of crude oil for $3.51 billion (ZAR51 billion), Reuters reported.

The country’s lack of investment in the energy sector has seen Egypt turn from an exporter to an importer with expectations set to produce an estimated 695,000 bpd of crude oil and condensates as well as 4.7 billion cubic feet of daily gas sales, Reuters reported.

The need for fuel

In June, ESI reported that natural gas shortages at electricity plants during Egypt’s 2014 summer season had prompted the government to reduce the load on the national grid by cutting off power. The deficit at the time was estimated to be approximately 2,500MW.

According to the Ministry of Electricity’s spokesperson Mohamed Al-Yamani all power stations in Egypt have undergone full maintenance between October 2014 and May this year and 3,632MW has been added to the national grid through the implementation of the ministry’s urgent plan to meet the electricity demand.

Addressing energy challenges

In July, Russian oil company Rosneft signed a two-year contract to supply an estimated 3.5 million tonnes of liquefied natural gas to the Egyptian Natural Gas Holding Company—the import will begin at the end of 2015.

Rosneft Chairman of the Management Board Igor Sechin and Egyptian Natural Gas Holding Company Chairman Khaled Abd El Badee signed the Term Sheet, which is to see a mutual gain for both parties, Rosneft said in a statement.

According to Badee this agreement would enable Egypt to bridge the gap between the current power shortage and the increasing demand until further expansion plans are in place.

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