By Oleg Vukmanovic, Editing by Susan Fenton and Jason Neely
Egypt launched the world's biggest tender for liquefied natural gas (LNG) on Sunday as officials from top energy companies and trading houses converged on Cairo undeterred by new rules forcing them to wait even longer to get paid.
After months of speculation and delay, state-run Egypt Natural Gas Holding (EGAS) released tender documents on Sunday bidding to secure 96 LNG shipments in 2017 and 2018, participants in the tender told Reuters.
An additional 12 optional cargoes were included in the tender, which EGAS may decide not to award, they said.
It is the biggest mid-term LNG buy tender ever issued, trade sources said.
Egypt, a major importer of commodities from wheat to diesel, helped buoy global gas markets last year after emerging as the fastest-growing new LNG consumer.
Once an LNG exporter, Egypt turned into a net gas importer just as global spot prices plunged.
Commodity trade houses, led by Switzerland-based Trafigura , vied to supply Egypt as the country looks to buy until new gas finds can be developed offshore.
But Egypt's worsening credit profile has tempered initial enthusiasm as suppliers fret over payment difficulties given the country's sinking economy and shortage of U.S. dollars.
Under the latest tender terms, LNG suppliers may have to wait as long as six months after delivery to get paid, according to two sources with knowledge of the matter.
At a meeting with energy suppliers this month Egypt discussed extending payment deadlines to as much as 120 and 180 days after delivery to give itself more breathing room, the sources said.
"I know that the 180-day payment terms were something agreed in Cairo a couple of weeks ago across all products and is a sign of the current situation in Egypt," one trading source said.
LNG shippers previously got paid 90 days after delivery.
Firms may think twice about committing to large supply positions carrying credit risks, but the tender is expected to draw large crowds given generally weak demand for LNG.
"It's a big short in a long market - I expect participation to be huge," a trade source said.
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