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Oil & Gas

EGAS awards tender for 55 cargoes of LNG

Posted: October 15, 2015 at 6:46 pm   /   by   /   comments (0)


Egypt is to buy 55 cargoes of liquefied natural gas (LNG), equal to about a tenth of its annual gas demand, via a tender awarded to seven companies.

The cargoes, 10 more than Egypt originally tendered for, contain around 4.68 billion cubic metres of gas. The country consumed about 48 billion cubic metres of gas in 2014, according to figures from oil major BP.

“Head of EGAS Khaled Abdel Badie said that bids from seven companies had been accepted out of a total of 12 for the shipping of 55 cargoes starting this November and through December 2016,” EGAS, the state gas board said.

Egypt has emerged as a major new market for LNG because of falling output of oil and gas and rising demand have turned the country from a exporter to net importer. These cargoes are expected to meet much of Egypt’s near-term energy needs as the government tries to cope with its energy shortage.

Over the past year, Egypt has agreed major LNG import deals with European commodity trading companies as well as Russian and Algerian oil groups for its first-ever LNG import terminal.

The seven companies awarded supply contracts include Trafigura, Vitol, Noble Group, EDF Trading , Gas Natural, PetroChina and Shell , a ministry of petroleum source said.

Details of the purchase price for the cargoes were not immediately available.

The companies had met with EGAS over the weekend to discuss the tender. EGAS has not yet disclosed how many cargoes each company will provide. The tender originally called for 45 cargoes.

EGAS will also seek more LNG shipments in 2016 after issuing a tender for a third floating import terminal, an oil ministry source said.

In August, Egypt said it expected to buy 7.79 million tonnes of LNG for $3.55 billion this fiscal year. Egypt has also given the private sector a green light to import LNG, a step that could encourage private investment in the energy sector while easing supply shortages.

This latest batch of cargoes will be delivered into the country’s second floating import terminal, the BW Singapore, which arrived in late September and has a capacity of 600 to 700 million cubic feet per day.

The import terminals allow Egypt to import LNG and convert it to natural gas to feed into its energy grid. LNG is natural gas chilled to turn it into a liquid state.

(Source: Reuters)