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Egypt to import additional $1billion worth of petroleum products to meet summer energy needs: oil minister

Reuters, Monday 10 Feb 2014
petrol station
People stand in line at a petrol station during a fuel shortage in Cairo in this June 26, 2013 (Photo: Reuters)
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Egypt will need to import an additional $1 billion worth of petroleum products and secure significant natural gas supplies as it scrambles to meet energy needs for the summer, Oil Minister Sherif Ismail has told Reuters.
 
One government after another has struggled to cope with energy crunches, and Ismail said this coming season would be no exception.
 
Failure to find a solution could frustrate Egyptians, who rioted in the past over long lines at gas pumps just before the army toppled Islamist President Mohamed Mursi.
 
Political turmoil since a popular uprising ousted autocrat Hosni Mubarak in 2011 has paralysed decision making. Disarray in the energy sector will take time to fix, even after a new government replaces the army-backed interim administration.
 
"Of course there are needs," said Ismail, adding that efforts to import badly needed natural gas may not succeed.
 
"The intention is to (make available) liquefied natural gas (LNG) and (to get) LNG facilities in operation before the summer ...It is our prime concern and intention to solve this problem if not for this year by 100 percent then at least for the years yet to come."
 
Egypt in October tendered for a floating terminal needed to import LNG. An official said at the time that the government wanted the terminal in place by April, before temperatures rise and consumption spikes.
 
The tender has not yet been awarded, and experts say that time has run out for a terminal to be delivered and installed before the summer.
 
Ismail said the alternatives to importing LNG include shifting to using more expensive fuel oil and encouraging Egyptians to conserve energy during peak hours.
 
These steps may not suffice. Analysts say about 75 percent of electricity production in Egypt is dependent on gas, not fuel oil.
 
Saudi Arabia, Kuwait and the United Arab Emirates extended an economic lifeline to Egypt after the army ousted Mursi after mass protests against his rule.
 
Deeply mistrustful of Mursi's Muslim Brotherhood movement, these Gulf Arab states pledged billions of dollars to the army-backed government, including petroleum products.
 
Egypt has said it has received $4 billion in fuel products from Gulf nations since Mursi's ouster. Ismail said Egypt would require more imports for the summer.
 
"The first estimate...is that we will need to import petroleum products of around $250 million per month during the four summer months," Ismail said in an interview.
 
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