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Sunday, 16 February 2020

Egypt officially became a net exporter of LNG last year, bringing our gas hub ambitions ever closer

Egypt officially became a net exporter of LNG last year, bringing our gas hub ambitions ever closer: Egypt’s imports of liquefied natural gas (LNG) fell to zero in 2019 and exported USD 1.24 bn-worth of LNG, marking a nearly 150% y-o-y increase, according to Capmas figures released on Thursday. Oil Minister Tarek El Molla had been saying since 2018 that Egypt’s LNG imports would come to an end as of October of that year, and that Egypt would begin exports by January 2019 as more output from gas fields is connected to the national grid. Crude oil and butane gas imports also dropped last year, while exports of petroleum products rose 4.5% y-o-y to reach USD 4.9 mn.

The milestone comes as doubts continue to loom over the viability of our current LNG selling prices. Earlier this year, El Molla said Egypt would sell gas at USD 5/mmBtu under long-term contracts in response to falling gas prices. Analysts have said the asking price may be too high for European markets and that our exports would face heavy competition in Asia.

In other gas news: Israel is slowing production from its Leviathan gas field to 60% of its capacity due to a malfunction in the field’s subsea pipeline, according to Reuters. Leviathan is one of two gas fields supplying natural gas to Egypt under the landmark USD 19.5 bn agreement Alaa Arafa’s Dolphinus Holding signed in 2018 with Delek Drilling and Noble Energy.

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