Peteroleum Ministry moves to liberalize gas sector

As part of a plan to liberalize Egypt’s gas market, Petroleum Minister Sherif Ismail has established a unit within Egypt’s state-owned gas company charged with supervising the sale and distribution of natural gas by private companies, the ministry announced Wednesday.

According to a ministry statement, the ministry plans to allow any party within Egypt to import gas from anywhere in the world, providing it does not affect Egypt’s national security.

Gas importers will be permitted to use the gas for their own purposes or to re-sell it to other companies, paying a tariff to transport gas via the national grid.

“This is a step toward the future liberalization of the gas market in Egypt,” the ministry said.

The announcement is in line with previous statements from the ministry. In January 2014, Ismail told Reuters that the ministry had lifted regulations that prevented private companies from importing gas. "If the private sector has the desire to import natural gas at their expense, we have no problem with it," Ismail told Reuters at the time.

Egypt does not currently have the necessary facilities for either the government or the private sector to import natural gas, but has rented a floating import terminal which is scheduled to arrive next month, with a second terminal expected to arrive in July.

The new EGAS unit should be up and running within six months, and will be responsible for helping to set regulations and a pricing structure for gas sales, as well as calculating tariffs for private use of the national grid and developing model agreements for the transmission, distribution and storage of natural gas.

The announcement comes a week after Egypt’s cabinet approved a draft law that will allow private companies to produce, transmit and sell electricity via the country’s national grid.