Egypt Starts Weaning Itself Off Foreign Gas as Output Surges
AMSTERDAM, May 11 (Reuters) - Egypt is holding talks with its liquefied natural gas (LNG) suppliers to defer contracted shipments this year and aims to cut back on purchases in 2018, as surging domestic gas production squeezes out demand for costly foreign imports.
Cairo's desire for gas self-sufficiency by the end of 2018 bodes ill for traders having to reshuffle LNG out of the country amid concern over the impact on global gas prices if replacement markets for the world's eighth-biggest importer of the super-cooled fuel are not found fast enough.
State-run importer EGAS aims to defer dozens of liquefied natural gas (LNG) cargoes due this year, analyst, trade and industry sources say.
It 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.
EGAS did not respond to requests for comment.
As demand growth among the old guard of Asian gas-consuming nations such as Japan slows, new entrants - led by Egypt - has accounted for 86 percent of net growth since mid-2014, EDF's head of energy market analysis Teddy Kott said.
"That was a demand disruption that not only exceeded Fukushima in terms of scale but rivalled it in terms of pace," he said, referring to Japan's 2011 nuclear meltdown, and resulting reactor closures that lifted the LNG out of its last downturn.
A trader said: "Egypt was the biggest short going."
Global LNG output is set to jump by a third, hitting 452 million tonnes by 2020, and with Asian spot prices <LNG-AS> down by 72 percent since early 2014, adding new markets to soak up the glut is key to stemming the rout.
At the heart of Egypt's revival is a stunning run of discoveries, a potential boon for the government as it embarks on politically sensitive economic reforms and struggles to rein in inflation running at a three-decade high.
"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.
Eni's Nooros is churning out 900 million cubic feet of gas daily, Pollard said, becoming Egypt's biggest producing field since it came on stream late in 2015.
Production from two BP fields in the West Nile Delta development, Taurus and Libra, just started eight months ahead of schedule. Its North Alexandria gas fields are set to boost output as well.
DEFERMENTS
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Macquarie Strategists Expect Brent Oil Price to Grind Higher
- Japan Failing to Meet Corporate Demand for Clean Power: Amazon
- Pennsylvania County Joins List of Local Govts Suing Big Oil over Climate
- UK Oil Regulator Publishes New Emissions Reduction Plan
- PetroChina Posts Higher Annual Profit on Higher Production
- US, SKorea Launch Task Force to Stop Illicit Refined Oil Flows into NKorea
- McDermott Settles Reficar Dispute
- Russian Navy Enters Warship-Crowded Red Sea Amid Houthi Attacks
- USA Commercial Crude Oil Inventories Increase
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil Demand Outpaces Expectations, Testing Calculus on Peak Crude
- House Passes Protecting American Energy Production Act
- TotalEnergies Restarts Production in Denmark's Biggest Gas Field
- Republican Lawmakers Say IEA Has Abandoned Energy Security Mission
- USA Oil and Gas Job Figures Jump
- Blockchain Demands Attention in Oil and Gas
- Houthis Warn Saudi Arabia of Retaliation If It Backs USA Attacks
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Summer Pump Prices Set to Hit $4 a Gallon Just as Americans Hit the Road
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Equinor Makes Discovery in North Sea
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension