Egypt looks to secure LNG production and supply

With its significant reserves of liquefied natural gas (LNG), Egypt has been a key exporter for regional consumers over the past decade but with growing domestic consumption and a number of fiscal constraints, the country has been looking to secure additional supplies by expanding LNG capacity.

In May the Egyptian government signed a letter of intent with the Norwegian shipping company Höegh LNG for the use of a floating storage regasification unit (FSRU), to be located on the port of Ain Sokhna for a period of five years. FRSUs regasify liquefied natural gas, a key step for expanding Egypt’s capacity to process imports.

It had also lined up LNG shipments from Algeria’s Sonatrach, Russia’s Gazprom, and France’s EDF.

By mid-July, however, the deal with Höegh had stalled, according to Reuters, prompting Egypt to reopen talks with the US-based FSRU operator Excelerate Energy. Experts say it will take about six months after a deal has been struck for the facility to come onstream, which will likely mean further gas shortages this year.