Gas imports from Israel to save Egypt $10 per million BTUs

The government should allow the Damietta and Edco factories to import gas from Israel and obtain a share of the imported gas to meet the needs of the local market said Medhat Youssef, former Deputy chairman of the Egyptian General Petroleum Corporation (EGPC).

Egypt previously exported gas to Israel, he added, an exchange which he said has benefitted Egypt

Egypt will receive gas imported from Israel at a price no greater than $8 per million BTUs compared to an average price of $16 per million BTUs from other countries.

He pointed out that importing liquefied natural gas (LNG) will require extra costs for renting regasification boats that will convert the gas back into its gaseous form. The total costs for importing the gas, in addition to regasification and transportation expenditures, will reach $18 per million BTUs, Youssef said.

If the government begins importing gas from the beginning of 2015, it will not be able to fulfill the supply amounts contracted with Damietta and Edco. The government will import approximately 500 million cubic feet daily for power stations while the factories require 1.88bn cubic feet daily, unlike other sectors.

If the government agrees to import gas from Israel it will be able to meet market needs and restart the Damietta factory operations, Youssef said. The operations have been stalled for three years in exchange for waiving international arbitration against the government.