Egypt asks to postpone some LNG deliveries to 2027 — OilPrice

Egypt has asked suppliers to postpone five of the 15 liquefied natural gas cargoes scheduled for November until 2027. The decision was made amid rising LNG import costs and declining domestic gas production, OilPrice reports.

Import costs

According to an unnamed government official cited by Asharq Bloomberg, the cost of one LNG cargo has increased by up to 100% since September and exceeded $100 million. Since July, Egypt has already deferred about 15 LNG cargoes.

The Ministry of Petroleum allocated $10.1 billion for LNG imports in the fiscal year that began on July 1. As of October 6, $5.8 billion had been spent, while about $1 billion was allocated for November cargoes.

To reduce costs, the Egyptian General Petroleum Corporation, EGPC, purchased six cargoes of high-sulfur fuel oil for delivery in November and December. Fuel oil imports into the country had been rising since April and exceeded 640,000 tonnes in October. QatarEnergy has maintained force majeure on LNG supplies since April and extended it until the end of December on October 28.

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Production decline

Egypt's natural gas production fell to 3.63 billion cubic feet per day in August. OilPrice links this to the fact that old fields are being depleted faster than new wells are brought online.

In July, the country recorded gas imports exceeding its own production for the first time. In August, imports amounted to 3.44 billion cubic feet per day: 2.24 billion cubic feet of LNG and 1.2 billion cubic feet of pipeline gas from Israel.

Exploration and renewable energy

Egypt extended the application deadline for 14 exploration blocks in the Western Desert, the Gulf of Suez, the Mediterranean Sea, the Nile Delta, and northern Sinai until December 14. The country also plans to raise the share of renewable energy in electricity generation to 45% by 2028. Finance Minister Ahmed Kouchouk said in October that every gigawatt of new solar, wind, or nuclear capacity could save the country about $250 million in gas imports.