Egypt Delays LNG Imports Last Minute With Lower Power Demand

(Bloomberg) -- Egypt, which surprised the market with massive liquefied natural gas tenders this year, has abruptly turned away several imported cargoes this month.

Lower electricity consumption amid cooler weather means the North African country requires less liquefied natural gas than it did during the scorching summer, a person familiar with the matter said. As a result, Egypt is rescheduling taking deliveries from this quarter to the next one, the person said, asking not to be named because of the private nature of the information.

The pause comes as a respite as LNG shipments are costly for the nation that has lost most of its Suez Canal revenue as commercial ships avoid the key waterway following Houthi attacks in the Red Sea. Lower demand from Egypt now also frees up more cargoes for Europe, where cold weather has bolstered demand and prices. 

Officials at Egypt’s energy ministry did not immediately answer calls seeking comment.

There are no technical issues with the floating LNG terminal that Egypt has leased this year to address acute power shortages, the person said. Traders have speculated about a fault at either Hoegh Galleon, a floating terminal at Egypt’s Ain Sokhna, or the Energos Eskimo at Jordan’s Aqaba. The Jordanian terminal is used for additional imports into Egypt and is connected to that nation by pipeline.

Egypt’s LNG imports soared this year as a hot summer raised demand and domestic production of gas declined. The North African country produced 3.8 billion cubic meters of gas in September, 19% lower than a year ago, according to the latest data from the Joint Organizations Data Initiatives. 

Fuel purchases have continued into the cooler months and the nation has not exported a single shipment since April. 

The recently imported cargoes were diverted from both Egyptian and Jordanian terminals, often with shipments already near the facilities. Two vessels are currently waiting to unload near Ain Sokhna. 

It’s unclear if the current postponement of deliveries will affect Egypt’s plans to seek more fuel from the market for the first quarter.

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