Egypt has signed an agreement with Norwegian Liquified Natural Gas services firm, Hoegh LNG on Monday for a Floating Storage and Regasification Unit (FSRU) which will allow Egypt to ease its energy shortages with LNG imports.
The contract entitles Egypt to rent the FSRU for a period of five years, to store and re-gasify imported LNG, providing over 500 million cubic metres of natural gas daily to the national grid, state run news agency MENA reported on Monday.
Egypt has been suffering from a mounting energy crisis as domestic production of natural gas, predominantly used in power stations, has failed to keep up with rising consumption.
The FRSU is due to start operations in Egypt's Ain Sokhna port on the Red Sea in March 2015 at the latest, according to MENA.
Egypt has signed preliminary agreements with Algeria's Sonatrach and Russia's Gazprom to import 14 shipments of LNG, and is currently examining seven different offers for LNG imports it received in an international tender last month, MENA reported, citing the head of the Egyptian Natural Gas Holding (EGAS).
In September, Egypt awarded oil and gas exploration blocks worth $187 million to foreign firms.
Last month, Egypt paid $1.5 billion out of $6.4 billion in debt to foreign oil and gas companies to encourage them to step up research and exploration and boost local production.