Egypt Seeks to Clinch LNG Deal With Algeria

Source: Algeria Times 7/24/2014, Location: Africa

Egypt is set for an expensive price tag as it seeks to clinch a deal to import much-needed liquefied natural gas from Algeria, according to people familiar with talks between the two countries. Late last month gas-rich Algeria agreed in principle to supply Egypt with roughly five cargoes containing 145,000 cubic meters of LNG each before the end of the year. The deal, made during a visit by Egyptian President Abdel Fattah Al Sisi to Algiers, is intended to alleviate Egypt's energy crisis after talks for it to import more gas from Qatar broke down last August due to political tensions. "We had initially hoped that Algeria could be willing to give us a good discount or flexible credit terms, but as we stand we are likely to pay a high price for the deal," a senior Egyptian oil official said. "Algeria wants us to pay almost $13 per million British thermal units, or about $250 million for the shipments, and this is even higher than the $11 per MMBtu it gets from many of its customers," the official said. Another person familiar with the talks said Algeria has made it clear it wants a price of more than $12 a MMBtu for the LNG cargoes. However, in a sign of progress in the talks, Algeria is assessing the technical feasibility of discharging its LNG at Ain Sukhna port, on the Suez Canal east of Cairo, the people said. Failure to agree a deal would be a significant blow for Egypt. Once a gas exporter to markets from Asia to South America, Egypt became an importer for the first time last year after its own supply failed to keep pace with rising domestic demand. Foreign oil and gas producers have curbed local production in the last couple of years due to political unrest, leaving Egypt with limited options to meet its gas demand. For more information about related Opportunities and Key Players visit Algeria Oil and Gas Projects


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Related Categories: Coal  Electricity  General  Natural Gas  Oil 

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