By Ahmed Tolba
A meeting will be held in the coming days between officials from the ministries of Oil, Finance, and Electricity to agree on a solution to issues threatening the implementation of agreements to import liquefied natural gas in order to meet Egyptian power stations’ needs for fuel.
An official from gas holding company EGAS told Al-Borsa that the meeting will aim to analyse methods for managing the funding necessary to import shipments, while the finance ministry has refused to finance imports at a time when the oil sector is unable to provide it either by itself or through other facilities.
The official pointed out that the value of the quantities required to provide 500m cubic feet of gas per day to run power plants is estimated at around EGP 21.5bn ($3bn) annually, an amount which the oil sector is unable to produce, especially since the Ministry of Electricity has not paid dues to the Ministry of Petroleum amounting to EGP 50bn.
The source added that if the Ministry of Finance continues to refuse to take measures to secure the funding, EGAS will not be able to provide the fuel needed to operate power plants. This will threaten a more intense repeat of the power crisis that struck Egypt this summer, he said, explaining that the failure of various government agencies to pay debts owed to the oil sector exceeding EGP 150bn, has led to the existence of a huge liquidity problem for the petroleum sector and an inability to repay dues to foreign partners.
EGAS has signed contracts to import about 14 shipments of liquefied natural gas from Algeria and Russia out of a total of 36 total shipments that Egypt requires next year. Supplies will arrive in December or January 2015 at the latest, according to the official.