EMEA News
Qatar Offers Egypt Free LNG Cargoes
Qatar has offered to help Egypt address an energy shortage, promising five free liquefied natural gas (LNG) cargoes to help prevent wide power outages during the summer, the Wall Street Journal reports.
The cargoes, which would each hold about 3.2 billion cubic feet of natural gas, are "a gift to the Egyptian people during the summer months," according to Egypt's petroleum ministry.
The two countries have been working to finalise a deal in which Qatar would supply 18 to 24 LNG cargoes to customers currently receiving Egyptian gas, allowing more domestically produced gas to remain in the country.
"The gift we got today from Qatar basically gives us more room and time to finalize swap deals with them and other producers," said Tarek el-Barkatawy, the head of state-owned Egyptian General Petroleum Corp.
Barkatawy said the free cargoes allow Egypt to pay for the gas involved in the swap at a higher price than the $8 per million British thermal unit (Btu) that it had proposed when the swap was originally planned in April.
"We can afford [to pay] the price Qatar wants because overall the free cargoes come as a discount over the total swap deal," he said.
"We have not decided yet whether we will go for 18 or 13 cargoes, but basically we will pay according to where the natural gas is heading.
"So if it heading to U.K. customers it will be around $10 [per] BTU and if it is going to Asia, it would be around $13 [per] BTU."
The Wall Street Journal reported last week that Egypt was struggling to complete oil supply deals because it has not been able to provide acceptable bank guarantees.
