Egypt Daily News – Four trade sources told Reuters on Friday that Egypt has fully awarded a recent tender for the purchase of 20 shipments of liquefied natural gas to meet winter demand, following a sharp decline in domestic gas production.
This is the first time Egypt has issued a tender to meet demand in the winter since 2018. The largest Arab country by population has returned to being a net importer of natural gas this year, having purchased more than 50 shipments since the beginning of the year and abandoned its plans to become a reliable supplier to Europe.
The tender, issued by the Egyptian General Petroleum Corporation and closed on September 12, aims to cover demand in the fourth quarter of 2024 and was awarded on the basis of deferred payment for six months.
A knowledgeable source said, “Despite the geopolitical challenges in the region and the limited supply in the market, the Egyptian General Petroleum Corporation received offers from more than 15 major entities at highly competitive prices that were 30% to 40% lower than the expected market prices.”
He added, “The offers were at a premium of about a dollar or more per million British thermal units above the (standard gas price on the Dutch gas futures trading platform), without the financial cost, which amounts to about $0.60 per million British thermal units… “This is much lower than market expectations of a premium exceeding two dollars per million British thermal units.”
Three other trade sources said that the tender was awarded at a premium ranging between $1.70 and $1.90 above the standard gas price on the gas futures trading platform.تي.Dutch.
The shipments include 17 deliveries that will be made between October 4 and November 29 to the floating station at the Ain Sokhna port on the Red Sea in Egypt, and three shipments to the port of Aqaba in Jordan.
Among the companies that won the tender are Total Energies, Shell, and BP.With Glencore, the commodity trading company, and Janfour. Saudi Aramco won a few shipments, similar to Hartree for commodity trading.
According to the consulting firm Energy Aspects, domestic gas production in Egypt fell to its lowest level in six years in May, and it is expected to decrease by another 22.5% by the end of 2028, while electricity consumption is projected to jump by 39% over the next decade.
Earlier, the spokesperson for the Ministry of Petroleum and Mineral Resources, Hamdi Abdelaziz, stated that the holding company for gas has increased the contracted shipments of liquefied natural gas to supply the Egyptian electricity grid in order to avoid returning to load shedding again.
He added: The imported liquefied gas is converted into gas and pumped into Egypt’s national electricity grid for electricity generation. We have a ship in Sharm El Sheikh that converts liquefied gas into natural gas, which will be continuously pumped into the Egyptian gas network.
Regarding the possibility of a return to power outages in the upcoming period, “Abdulaziz” stated: “I cannot confirm or deny, as it depends on technical standards, and we currently do not have a shortage in our needs for gas and diesel for electricity generation.”
