Egypt To Receive 17 LNG Shipments To Tackle Power Crisis

June 27, 2024


Egypt is set to receive 17 shipments of liquefied natural gas (LNG) following the closure of a recent tender. According to a Reuters report, these shipments are scheduled as seven in July, six in August, and four in September, with deferred payments of up to six months.

On Tuesday, the Cabinet convened a press conference to address the persistent power cuts that have affected various regions of the country over the past week, with some areas experiencing outages lasting more than four hours.

Urgent $1.1B for LNG and mazut shipments

Prime Minister  Mostafa Madbouly announced that Egypt will allocate $1.1 billion to import mazut and natural gas shipments aimed at preventing nationwide power cuts from the third week of July through the end of the summer season in September.

Madbouly attributed the unprecedented and prolonged power outages experienced last week to the halt of natural gas production from a neighboring country, although he did not specify which one. He further explained that the decision not to utilize Egypt’s LNG reserves exacerbated the situation until the field resumes operations.

The Prime Minister stated that Egypt will receive a 300,000-ton shipment of mazut valued at $180 million to fuel its electrical power plants. Additionally, the remaining $1 billion worth of mazut or natural gas shipments is expected to arrive by the third week of July.

Fresh plan to save power

Madbouly also announced a new plan aimed at reducing electricity consumption nationwide. Starting July 1, all commercial stores will close at 10:00 pm, while pharmacies, restaurants, and supermarkets will be permitted to remain open until 1:00 am.

In parallel, state-owned TV channels have launched a media campaign encouraging citizens to conserve electricity both at home and in the workplace.

Offloading electricity

In response to the unprecedented summer heatwave, the Egyptian government has implemented an electric power relief plan, resulting in scheduled power cuts of up to three hours daily nationwide. This initiative is also a response to regional tensions impacting LNG shipments, which has led to a gas shortage crisis in the local market.

As a result of this crisis, four major fertilizer producers in Egypt—Abu Qir Fertilizers, KIMA, Sidi Kerir, and Mopco—have suspended their operations until further notice due to their heavy reliance on natural gas.

To mitigate these challenges, Abu Qir Fertilizers, one of Egypt’s largest fertilizer producers, announced on Thursday that its board has decided to partially switch to hydrogen supplies.