Egypt Taps Market for LNG to Ease Impact of Extreme Summer Heat

(Bloomberg) -- Egypt plans to make its biggest purchase of liquefied natural gas in years as it steps up efforts to ease energy shortages amid extreme summer heat.

State-run Egyptian Natural Gas Holding Co. is asking the market for at least 17 shipments of the super-chilled fuel for delivery over the next three months, according to traders with knowledge of the tender.

The purchase may further tighten the global LNG market, as supply outages and hot weather across the Northern Hemisphere boost demand for the fuel used for cooling in summer. 

Egypt, which had largely stopped importing the fuel in 2018, is returning to overseas purchases this year to help alleviate the strain on its power and gas networks. It’s already implemented rolling blackouts — idling several petrochemical and fertilizer plants — as hot weather gripped the North African country from April. 

Egypt began purchases in recent months via Jordan, because a floating terminal it rented in May for direct deliveries will only be installed in June. 

That floating terminal Hoegh Galleon has now approached Ain Sokhna, on the Red Sea coast, according to ship-tracking data on Bloomberg. It will remain there for 19 to 20 months.

In the latest tender, EGAS is seeking shipments via both Ain Sokhna and Jordan, according to traders. 

For Egypt, another summer of massive rolling outages would pile pressure on the state budget and a population already grappling with high inflation, a devalued currency and rising domestic fuel prices. 

©2024 Bloomberg L.P.