By Ahmed Tolba
Bidding results will be announced next January, with the import of 2,000 MCF of gas per day currently up for grabs
Eighteen Egyptian, Arab and foreign companies took part in a recent bid round hosted by the Egyptian Natural Gas Holding Company (EGAS) that grants the private sector rights to import and sell natural gas in Egypt.
“Offers are currently being made for the first part of what will be two stages of the bidding process. The first round will look to assess each company’s financial and technical offers and will conclude with contracts being signed at a later date,” stated an EGAS official who prefers to remain anonymous. The last day to submit offers to take part in the bidding was 22 November 2012.
EGAS stated that the results of the bid round will be announced in the first half of January 2013, and that operations will start no later than next May.
The official added that the number of companies receiving licenses to import gas, “will be determined during the second stage of the process, which will also decide how much each company will be permitted to import, at what prices they will be allowed to sell, in addition to the amount of fees to be paid to Egypt’s oil sector in exchange for use of the country’s pipelines.”
The amount of gas expected to be imported was estimated to be between 1,500 and 2,000 million cubic feet (MCF) per day. Egypt as a whole produces 6,000 MCF per day, 3,500 of which goes towards the country’s electrical consumption, with the rest slated for industrial and residential use.
The government’s decision to allow private sector companies to import gas came as an attempt to help close the current gap between supply and demand in Egypt, especially in the country’s electrical sector, whose rate of consumption is estimated to rise to 15 per cent higher than what was previously expected. In light of the government’s recent inability to supply the nation’s industry with sufficient amounts of energy, 12 more licenses will be granted to private companies to establish new steel and cement factories. Government sponsored development projects seeking to search for natural gas in the Mediterranean Sea have also been postponed due to the political uncertainty currently gripping Egypt.