The Egyptian Natural Gas Holding Company (EGAS) has stopped pumping gas to Misr Fertilizers Production Company (MOPCO), Egyptian Fertilizer Company (EFC), and Egyptian Basic Industries Corporation (EBIC) factories for an indefinite period as a result of increased consumption of gas at power stations and low production rates, said a senior official at EGAS.
The total contractual amount pumped to the three factories is 230m cubic feet of gas per day. According to the official, by contract MOPCO receives 45m cubic feet of gas per day, EFC 120m cubic feet and APIC 65m cubic feet. These factories produce urea and ammonia.
In addition, 40m cubic feet of gas supply per day to one of the production lines of Abu Qir Fertilizers Company and 10m cubic feet to Alexandria Fertiliers (AlexFert) have been stopped. By contract, 45m cubic feet of gas should be pumped to AlexFert.
EFC’s production has been paused due to the stoppage in gas. EFC produced about 1,500 tons of urea per day on average, an amount valued at $450,000, said Ahmed Said, the general director for production at EFC.
Said added that the company is using this time to maintain its plants until EGAS resumes pumping gas, the date of which has not yet been determined.
Mohamed Khalil, director of exports at Abu Qir Fertilizers, declined to comment on the issue.
EGAS has cut about in total about 550m cubic feet of gas per day to cement and fertiliser factories, which consume estimated 940m cubic feet of gas daily, as a result of declining gas production, the EGAS official said.
330m cubic feet of daily gas supply have been cut from cement factories, which usually consume 430m cubic feet of gas. At fertiliser companies, a total of 220m cubic feet of gas have been cut. Fertiliser companies consume 510m cubic feet of gas daily, according to the official.
The delay in the arrival of a gas import terminal from Norwegian company Höegh from this August to December has resulted in the halt of receiving shipments of liquefied natural gas (LNG), which had been agreed upon for the current summer months, the official said.
The industrial sector will face a significant shortage of gas supply until the end of this year, due to the fact that power plants currently consume more than 60% of Egypt’s gas production.
The government was working to start receiving shipments of LNG to power plants in September, but it cannot import gas until the terminal arrives.
If not for the delay, the terminal would have been moored off of the Red Sea port of Ain Sokhna at the end of August, in the framework of a five-year contract. It would have imported 50m cubic feet of gas per day, according to the official. He noted that EGAS announced Höegh’s winning of a tender to supply the floating station to receive imported shipments of LNG and convert them into their gaseous form.
The Ministry of Petroleum is now looking for a contract with other international companies to provide a temporary gas import terminal for the month of September, so that Egypt can receive LNG shipments needed for power stations during the current summer months, the official continued.
EGAS needs are about $1bn in order to import gas for power plants during the three summer months. The amount would finance the import of 17 shipments of liquefied gas, renting the terminal and docking station at the Ain Sokhna port, and opening letters of guarantee.
An agreement was reached with Russia’s Gazprom to provide seven shipments of LNG. France’s EDF and Algeria’s SONATRACH will provide five shipments each, and each shipment will hold 170,000 cubic metres of gas.
One shipment of LNG meets the needs of power stations for six days, as 500m cubic feet is required daily, according to the official.