Egypt expects LNG deals with Shell and Total

Egypt expects LNG deals with Shell and Total
Egypt has seen renewed interest in its energy sector in recent months.
Published: 5 March 2015 - 2:51 a.m.
By: Slavka Atanasova

Egypt's oil minister said on Monday the government could agree additional liquefied natural gas (LNG) import deals with Shell and Total.

In an interview with Reuters, Sherif Ismail revealed that a new round of talks were launched to secure LNG until 2020 when the country hopes to reduce its reliance on the fuel.

"There is a very high possibility that Total and Shell will provide us with LNG for the period of two years from now," he said, adding that recent deals arranged with commodity trading firms and Algeria will meet just two years of demand.

The minister declined to give contract details with Shell and Total, saying Egypt expects to either launch a new bid round or begin direct talks for new LNG supply by the middle of the year. 

Egypt is in final stage talks with Gazprom and BP for LNG supply and a deal to buy 21 cargoes from BP should be finalised by the end of the month at the latest, the minister said.

"It is not clear yet if we will open a bid round or whether we will pursue direct negotiations."

The minister said that a Floating Storage and Regasification Unit, an import terminal, that it contracted from Norway's Hoegh LNG should be in place by the end of the month, when it also expects to receive its inaugural cargo.

Egypt is also working to boost offshore oil and gas output by paying foreign explorers more to produce.

The North African country has already agreed to pay BP, RWE Dea and Edison more for their production, and is now close to finalising a similar deal with BG Group for output from its West Delta Deep Marine concession, the minister said.

BG Group will be paid close to $5.88 per million British thermal units (mmBtu) for gas production, compared with $3.95 per mmBtu previously, he added. 

 

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