Egypt in talks to lease new LNG terminal as imports pick up

 Egypt is planning to lease a natural gas import terminal as it steps up overseas purchases in a bid to avoid energy shortages this summer. 

The state-run Egyptian Natural Gas Holding Co. is in talks with providers of floating storage and regasification units, according to two people with knowledge of the matter, who asked to be identified because the talks are private. EGAS is looking for a five-year contract that can be extended, one of the people said. Egypt oil ministry officials didn’t respond to phone calls seeking comment.

EGAS recently bought at least one LNG shipment for delivery in the next month and is looking for several more, traders with knowledge of the plan said earlier. The country, which uses gas for cooling to escape extreme heat, is securing supply this early in the year to potentially avoid the chronic power blackouts of last summer.

The imported cargo will be routed through an existing facility in Jordan, after a deal between the two countries last year to jointly use a terminal in Aqaba. Cairo’s lease of another floating storage and regasification unit, the BW Singapore, ended last year.

Egypt’s LNG imports mark a major shift after it largely stopped purchasing the fuel in 2018 when the massive Zohr field boosted domestic production and turned the country into an exporter of the fuel. Local gas output, however, has dropped to the lowest level in years, which Oil Minister Tarek El-Molla said in February was because of natural decline at its fields.