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Wednesday, 17 October 2018

Höegh Gallant FSRU to leave Egypt this week

Gas import era ends as Höegh Gallant FSRU leaves Egypt this week: The Höegh Gallant floating storage regasification unit (FSRU), until recently the final critical link in Egypt’s natural gas import chain, is set to leave Egypt before the week is out, Oil Minister Tarek El Molla told Reuters, marking another milestone in Egypt’s cessation of gas imports. Höegh has agreed with Egypt to amend the terms of a five-year contract for the FSRU that will see the Norwegian company hired as an LNG carrier to a third party, Höegh said in a statement on Monday.

Egypt to make Höegh whole: The amendments also stipulate that the state’s EGAS will compensate Höegh for the rate difference between the original FSRU contract and the new LNG carrier agreement. Egypt will also compensate Höegh for equipment installed on the Ain Sokhna jetty for 3Q2018. “The amended contract is expected to become effective in October 2018 and will run to April 2020, the termination date of the original five-year FSRU contract.”

Background: El Molla officially pulled the plug on Egypt’s natural gas imports in September. That’s when the country received its final shipment of imported liquefied natural gas as we switch from being a net importer to a net exporter thanks to recent world-scale natural gas finds. Egypt’s total gas production output reached 6.6 bcf/d in September after capacity from the Zohr gas field hit 2 bcf/d.

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