By SUMMER SAID
Cash-strapped Egypt has frozen talks to import liquefied
natural gas from wealthy Qatar due to the political instability
and violence that erupted after the army swept the streets of
the supporters of ousted President Mohammed Morsi last week, an
official said Monday.
"We were planning to resume the talks very soon but as you
can see the situation in Egypt is very difficult," Taher Abdel
Reheem, chairman of the state-run Egyptian Natural
Gas Holding Co., or EGAS, told The Wall Street
"The talks are frozen with Qatar and we are not in a
position to initiate talks with any other country," he said
without specifying when the discussion with the Persian Gulf
emirate will be resumed.
Gas-rich Qatar already promised Egypt in June five free
shipments of LNG,
equivalent to 16 billion cubic feet, to compensate the foreign
partners that have already supplied extra domestically produced
gas to the North African country to avoid wider power cuts
during the summer months.
The gift initially gave Egyptian officials more time to
negotiate the terms of a deal agreed in principle in April to
secure around 13 LNG
cargoes to the overseas customers of two companies currently
exporting gas from Egypt -- BG Group and Malaysia's
Those companies would in turn supply an extra 500 million cubic
feet/day of domestically produced natural
gas, which would otherwise have been exported, to Egypt's
The first cargo from the April gas-swap deal was scheduled
to be shipped in May, but a disagreement over the price Egypt
would pay for the gas held up the agreement.
"The free cargos came at that time as a discount on the
bigger deal, and we had hoped that we could still convince
Qatar to give us good prices and easy credit terms but we did
not manage to resume the talks on that subject, especially when
Morsi was ousted a month later," Mr. Abdel Reheem said.
Oil and gas producers in Egypt have curbed local production
due to political unrest, but demand for energy has continued to
grow, resulting in rolling blackouts throughout the country
that have deepened public discontent.
In response the Egyptian government last year started
looking for deals to buy LNG and issued a tender to build an
import terminal that would start to operate in May this year.
However, those plans were cancelled, due to political and
An Egyptian official familiar with the matter who asked not
to be named said that the Egyptian government decided to give
up on the Qatari LNG
deal because the Gulf state supported the Morsi
"We felt that Qatar won't be as easy as it was during the
reign of Morsi and the coverage of their channel al Jazeera for
instance is still very biased towards the Muslim Brotherhood,"
the official said.
Qatari officials were not immediately available for comment.
The Gulf state's foreign minister told reporters in Paris
Sunday that his country had never given aid to Egypt's Muslim
Brotherhood and that all support went to Egypt as a whole and
"still continues till date."
Egypt has faced a natural
gas and diesel shortage since last year, which has pushed
up food costs, seen long lines at filling stations and
electricity blackouts. The energy-supply problems have deepened
popular discontent with Egypt's former ruling Islamist
government and exacerbated broader economic difficulties
The country is also struggling to complete oil-supply
agreements with Iraq and Libya aimed at easing diesel
shortages. It has been unable to provide acceptable bank
guarantees that would facilitate the flow of oil, people
familiar with the talks have previously said.
Dow Jones Newswires