Egypt is seeking to buy large quantities of gas this summer from global markets with deferred payments of up to 6 months, conditions that market sources said would narrow the list of bidders and increase bonuses at a time of great competitive demand from Asia.
In the past few years, Cairo has sought to be a reliable exporter of liquefied natural gas to Europe, but dwindling natural gas supplies forced it to return to importing gas.
17 shipments
Reuters quoted commercial sources as saying that the Egyptian Natural Gas Holding Company (EGAS) is seeking to purchase 17 shipments of liquefied natural gas through a tender that closes on June 26, and will receive 7 shipments in July, 6 in August, and 4 in September. September by ship delivery at port of arrival.
The sources said that to secure the required quantities, Egypt may eventually pay a premium of more than the average of one to two dollars per million British thermal units on the price of gas in the Dutch TTF center.
“Any longer-term payment terms would be a justification for paying an additional premium,” one of the sources said.
Standard & Poor’s data showed that Cairo has already paid a TTF premium of between $1.3 and $1.7 per million British thermal units for cargoes it bought earlier this year.
There is strong Asian demand for transatlantic gas, which is also expected to be the main source of supplies for Egypt, because the Bab al-Mandab Strait remains closed due to tension in the Middle East.
Asian request
“It is likely that only transatlantic LNG supplies will be able to compete in this tender,” said Samuel Goode, head of LNG pricing at commodity pricing agency Argus. “But demand from Asia, especially Japan, over the past weeks has been higher than many had previously expected.” “.
“Any non-standard (additional) clauses in the tender conditions will enhance this premium further,” he added.
The sources expected that the floating regasification and storage unit from the Australian company Hogg Galleon, which arrived at the port of Ain Sokhna on the Red Sea last week, would handle 12 of the expected shipments, while 5 other shipments would be received at the port of Aqaba in Jordan.
A number of traders said that they are carefully studying the tender, which is the largest purchase for Egypt in years, and comes against a backdrop of concern about credit risks and the difficult economic situation in the country.
Reuters quoted two other sources in two large companies in the oil and gas sector – according to the agency’s description – that the economic challenges facing Egypt and the shortage of hard currency have made the government owe billions of dollars owed to major companies.
The Egyptian government recently resumed paying arrears to some of these companies.
