Egypt needs about $2 billion of gas to cover summer demand until October, according to one of the sources familiar with the government’s plan, but a hard currency crunch means it lacks the funds to fully cover LNG imports.
“Without support from our friends in the Gulf, we will not be able to pay for these shipments,” one of the sources said.
Officials are looking to raise more money from allies, he added.
Saudi Arabia has financed three of the 32 LNG cargoes Cairo has bought so far this year, worth about $150 million at current prices, according to Reuters calculations, the two sources said.
Libya bought one cargo in July worth about $50 million with money from the National Oil Corporation, the sources added.
The Egyptian gas bill and financing from Saudi Arabia and Libya have not been previously reported.
An Egyptian petroleum ministry spokesman said details of the gas tender were confidential. The Saudi government, the Saudi central bank and Libya’s state energy company did not respond to Reuters requests for comment.
Egypt had to resort to load shedding last year to keep its grid running amid gas shortages and rising demand, and the worsening energy crisis is putting pressure on Cairo’s budget as it grapples with a hefty subsidy bill.
Egypt’s domestic gas production fell to a six-year low in May, down about 25% from its 2021 peak, and is expected to fall another 22.5% through 2028, consultancy Energy Aspects said.
The country had been planning to become a major gas exporter after Italian energy group Eni discovered the giant Zohr offshore field in 2015.
The Energy Ministry said at the time when Zohr began production in 2017 that the field would produce 2.7 billion cubic feet per day until 2039, but after peaking at 3.2 billion cubic feet per day in 2019, production has fallen to just 1.9 billion cubic feet per day in the first half of 2024.
Source: Money + Reuters
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2024-09-04 21:34:03
