EGAS goes to tender over FSRU

State-owned Egyptian Natural Gas Holding Company (EGAS) has gone to tender over a floating storage and regasification unit (FSRU), a floating liquefied natural gas (LNG) plant. The FSFU, EGAS Chairman Khaled Abdel Badie anticipated, will be in use by spring 2014: “We are renting it. It is expected to be used by next April […] It depends on the offers”. For Egypt to import LNG, the existence of an FSRU is imperative.

In May 2013, the world’s largest exporter of LNG, Qatar, gave five cargoes of LNG to Egypt, with the potential of that number increasing to 13. The LNG from Qatar was used to export to markets outside the country, which, in turn, made more gas available for the Egyptian market.

This agreement, however, threatened to collapse when the Egyptian army deposed Islamist president Mohamed Mursi. As his principle financer, Qatar was forced either to withdraw from the deal or accept the new regime. The latter option was chosen.

Political and economic instability has plagued Egypt since the downfall of Honsi Mubarak’s government in February 2011, which has meant a significant reduction in imported gas. This resulted in a dearth in fuel causing regular power cuts.

Egyptian Prime Minister, Hazen el-Bablawi, recently announced that the country was looking into repayments of US$ 6 million to foreign oil corporations.

Edited from various sources by Ted Monroe

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