Sunday, May 14, 2017

Egypt starts weaning itself off LNG, domestic production increases - ENTERPRISE / REUTERS / BP

Sunday, 14 May 2017

We’ve started weaning ourselves off imported natural gas, Reuters says: Egypt is holding talks with its LNG suppliers to defer contracted shipments this year and aims to cut back on purchases in 2018, traders and industry sources tell Reuters. 

Domestic gas production is squeezing out demand for foreign imports, Oleg Vukmanovic writes for the newswire. EGAS “is also scaling back LNG purchase plans for 2018 from 70 to as low as 30 cargoes, one Egyptian industry source added, signalling the withdrawal of one of the fastest-growing LNG importers from the global stage.”

The deferment is being driven by new gas discoveries. “Test flows from [BP’s] West Nile Delta have started ahead of schedule and Eni’s giant Zohr find is progressing quickly on track for first gas later this year, but it’s output from the Nooros field that has surprised everyone this year,” said Adam Pollard, senior North Africa oil and gas analyst at Wood Mackenzie. BP announced first gas from West Nile Delta, eight months ahead of schedule last Wednesday. “Already this year EGAS has deferred about ten shipments, with about 10-15 shipments left to go, trade sources said. The scale and speed of Egypt’s turnaround suggests the government may yet wean itself off foreign gas but how sustainable that turns to be will depend on domestic pent-up demand,” Reuters adds.