LNG import bill set to jump 185% this month, petroleum ministry source says

Egypt’s estimated bill for importing liquefied natural gas (LNG) is expected to surge 185% year on year in November, reaching about $2.21 billion, as global gas prices rise and geopolitical tensions disrupt shipping and maritime traffic, a source familiar with gas imports at the Ministry of Petroleum told Al Manassa.

Global energy markets have been hit by a wave of price increases, which has intensified since September amid the fallout from the US-Iran war and disruptions to oil and gas supplies.

The source, who requested anonymity, said the cost of a single LNG cargo reached about $100 million in November, up from $35.2 million in the same month last year.

Egypt’s natural gas deficit is approaching 3.3 billion cubic feet per day (Bcf/d) in November, the source said. Average domestic consumption reached about 7 Bcf/d in the first days of the month, against estimated domestic production of 3.7 Bcf/d.

The Ministry of Petroleum is working to bridge the gap through two main channels, the source said: importing natural gas from Israel, with daily volumes approaching 1 billion cubic feet, and increasing LNG imports to provide the equivalent of about 2.3 Bcf/d after regasification.

Meeting demand requires about 22 LNG cargoes a month, each with an average capacity of 150,000 cubic meters, the source said.

The import bill could be reduced by cutting the number of cargoes and replacing some imported gas with fuel oil to operate conventional power plants, or by reducing gas supplies to fertilizer factories, the source added.

As energy prices rise, the government has announced a new plan to rationalize consumption and government spending over the coming months. It has also cut gas supplies to fertilizer factories by 20%.

Accelerating development of domestic wells

The source said the Ministry of Petroleum is working with foreign partners to speed up the development of new wells and bring them online. The effort aims to boost domestic production, offset declining output from existing fields and reduce reliance on imports.

The current plan is to continue importing LNG through 2029 and 2030, using three regasification vessels as well as spare capacity from a fourth vessel stationed in Jordan under the two countries’ cooperation agreement.

The three regasification vessels have a combined capacity of about 2.75 Bcf/d. This figure excludes the Energos Winter, which was taken out of service after a fire at Damietta Port in late July, the source said.