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(Bloomberg) — Egypt is seeking to buy 20 cargoes of liquefied natural gas starting in October, marking the first time in years it will import the fuel in the run up to winter.
State-owned Egyptian General Petroleum Corporation issued a tender for 17 cargoes for its floating import terminal at Ain Sukhna and three more cargoes to be delivered into neighboring Aqaba, Jordan, according to people with knowledge of the matter. Egypt is seeking the deliveries from October to December, the people said.
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Rapidly-declining gas production in Egypt and an unusually hot summer have prompted the nation to increase its LNG imports this year to the highest level since 2018. Buying 20 more cargoes this fall and winter raises the prospect Egypt will become a net importer of gas. It also threatens to drive up prices in Europe and Asia.
“Egypt has really been the surprise on the global LNG market,” said Anne-Sophie Corbeau, a researcher at Columbia University’s Center on Global Energy Policy. “The production has totally collapsed. This is the problem, and there is no way around that: either you reduce demand or you increase net imports.”
The Egyptian General Petroleum Corporation didn’t immediately respond to a request for comment.
Until this year, Egypt was largely energy independent and exported LNG, helping Europe navigate its energy crisis in 2022. But Egyptian gas production has been declining, with output at its massive Zohr field in the Mediterranean down by about a third since 2019. Egypt’s overall gas output in May was near the weakest since 2018, according to the Joint Organisations Data Initiative.
Shortages are now so severe that Egypt can no longer produce enough gas to keep its electricity systems afloat during summer. The 20 cargoes the nation is seeking mark the first time it is buying LNG for the winter months since 2018, putting pressure on prices as heating season takes hold in Europe.
Egypt’s petroleum minister said in July that part of the reason oil and gas production had declined was an increase in arrears to foreign oil companies that has slowed down exploration and development programs. The country was working on clearing that backlog, he said at the time.
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