Sources confirm that Egypt has awarded the tender for 20 LNG winter cargoes to Egypt.
Four trading sources said on Friday that Egypt's recent bid for 20 cargoes (cartons) of liquefied gas to cover winter demand following a sharp decline in domestic production has been fully allocated.
It is the first time Egypt issued an tender to cover the winter demand since 2018.
This year, the most populous Arab nation has become a net gas importer. It has purchased more than 50 cargos and abandoned plans to be a reliable European supplier.
The tender was issued on September 12 by the Egyptian General Petroleum Corporation and covered the demand for the 4th quarter of 2024. It was awarded with a deferred-payment basis lasting six months.
Sources close to the issue said that despite the geopolitical issues in the region, EGPC had received competitive offers from 15 major players. These rates were 30-40% lower than the market price.
"Offers were about a $1 plus per million British Thermal Unit (mmBtu), without the financial costs, which are around $0.60/mmBtu...this was far less than the market expectation of a price premium over $2/mmBtu."
Three other trading sources reported that the tender was won at a premium between $1.70 to $1.90 over the benchmark gas prices at the Dutch TTF Hub.
The deal is for 17 cargoes that will be delivered to Egypt's floating port at Ain Sukhna on the Red Sea between October 4 and November 29 and three cargoes going to Aqaba in Jordan.
TotalEnergies won the tender, along with Shell, BP, and commodity traders Glencore, and Gunvor. Saudi Aramco and smaller commodities traders Hartree won some cargoes.
Energy Aspects, a consultancy, said that Egypt's gas production fell to its lowest level in six years in May. It is also expected to fall by another 22,5% by 2028. Meanwhile, power consumption will increase by 39% during the next decade.
Sources say that Saudi Arabia and Libya financed the purchase gas cargoes valued at $200 million in order to assist Egypt with its escalating energy crisis.
(source: Reuters)
