Gas imports should arrive by August, assures petrol minister

As Egypt continues to struggle with an energy shortage and increasingly frequent power outages, Petroleum Minister Sherif Ismail said on Monday that shipments of imported gas would arrive in the country in July or August. 

Construction on a floating and regasification unit (FSRU) is underway and the facility should be ready around the same time the shipments arrive, the minister said, refuting claims that the tender with Norwegian firm Hoegh LNG to import liquefied natural gas had been halted.

"The energy mix in Egypt is insecure and unsustainable,” Ismail said at a conference on Monday. He said 96 percent of energy consumption is met through the use of oil and gas, with the remainder secured from coal and hydropower.

A conference organized by the American Chamber of Commerce and the Petroleum Ministry set out to address Egypt’s energy problems and discuss possible solutions, as well as a strategy for the coming five years to enable the country to meet growing demand.

The contentious issue of energy subsidies was one of the main challenges Ismail addressed. The subsidy system has left the price of some products unchanged since 1992, while international prices have increased exponentially.

Moreover, the increasing dependence on oil and gas has proved to be problematic, as evidenced by the recent energy shortages.

Moving forward, planned developments in the sector include new concessions that have been awarded in 2013, debt payments to international oil companies — amounting to US$1.5 billion out of a total US$6.3 billion — developing infrastructure and resolving seven of 19 arbitration cases with international oil companies.

"We have resolved many of the problems with international oil companies in Egypt. The remaining we are currently addressing," Ismail said.

Newly awarded concessions should increase total production in natural gas, given that wells that were discovered in mid-2000 have matured and production capacity has been falling.