Egypt is planning to buy large quantities of fuel oil to run power plants, as the cost of natural gas rises and domestic production declines.
The Egyptian General Petroleum Corporation (EGPC) has issued a tender to purchase nearly 2 million tons of fuel oil, to be delivered in May and June, according to a source familiar with the matter who spoke to Bloomberg.
Egypt and other countries in the Middle East and North Africa often switch to burning oil or crude directly for electricity during the summer, when air conditioning demand spikes.
Once a net exporter of liquefied natural gas (LNG), Egypt has now become a net LNG importer, driven by falling gas production and higher domestic demand. To meet its energy needs, Egypt has recently increased LNG imports.
In response to the supply challenge, the state-owned Egyptian Natural Gas Holding Company (EGAS) signed a 10-year agreement with Hoegh Evi earlier this week. The deal involves deploying a floating LNG import terminal near Alexandria, on the Mediterranean coast.
The ship Hoegh Gandria will be converted into a Floating Storage and Regasification Unit (FSRU) and is expected to begin operations in late 2026. It will be located at the Port of Sumed and will have the capacity to process up to 1,000 million standard cubic feet of gas per day at peak.
The new terminal is seen as a vital part of Egypt’s plan to build a more flexible and reliable energy system, according to Hoegh Evi.
The FSRU Hoegh Gandria will replace the Hoegh Galleon, which is currently Egypt’s only functioning LNG import terminal. The shift was first announced in May 2024, through an agreement between Höegh LNG, Australian Industrial Energy (AIE), and EGAS. The move is part of broader efforts to bolster energy security amid growing demand and declining gas output.
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