By SUMMER SAID
OPEC member and gas-rich Qatar will supply Egypt with up to
24 cargoes of liquefied natural gas starting May 28 as the
North African country struggles to meet its domestic energy
needs, the first under-secretary for agreements and exploration at the Egyptian Oil
Ministry said in remarks available on Thursday.
Under the swap deal, BG Group and Malaysia's Petroliam
Nasional Bhd will give Egypt about 500 million cubic feet/day
of the natural
gas they extract in the country to help ease its fuel
shortage, while Qatar Gas will send the LNG
directly to the companies' overseas customers, Tarek
el-Barkatawy said according to the state-owned Middle East
News Agency, or MENA.
Over four months, Qatar will send 18 to 24 cargoes of up to
3.3 billion cubic feet of natural
gas each, Mr. Barkatawy said.
The Egyptian oil ministry said earlier this week that the
two countries are still negotiating the credit terms for the
deal, but the North African country will not pay for these
shipments immediately in order to preserve its foreign
Egypt is working to secure oil- and gas-supply deals on
favorable credit terms from major Arab producers in an attempt
to ease fuel shortages and a government cash crunch that have
proved politically damaging for the country's Islamist
President Mohammed Morsi.
Libya, another member of the Organization of the Petroleum
Exporting Countries, has agreed in principle to offer Egypt
close to one million barrels a month of crude oil on a lengthy
one-year credit term, officials from the two countries told
The Wall Street Journal.
OPEC member Iraq has also agreed on a draft contract to supply
Egypt with 4 million bbl of crude a month on
three-month interest-free credit, officials from both countries
Egypt, a significant gas producer with much of its output
consumed domestically, began reining in exports last year and
is planning to issue a tender soon for local firms to import
gas to meet its domestic needs.
It is in talks with Russia for gas supplies, while Algeria
informed the Egyptian government it can only start negotiating
natural-gas deals next year once it boosts its domestic
production from new fields.
The country has faced a diesel shortage since last year,
which has in turn led to rising food costs, long queues at
filling stations and electricity blackouts. The fuel crisis has
compounded broader economic problems in the country, which in
2011 overthrew the government of Hosni Mubarak in a popular
uprising, paving the way for the electoral victory of Mr.
Morsi's Muslim Brotherhood.
Egypt's government is short of funds and has been
negotiating with the International Monetary Fund over a $4.8
billion loan, which analysts and investors say is critical for
the country. IMF officials left Cairo last month without
agreeing on the terms of the loan.
Dow Jones Newswires