Egypt has finalized a $3 billion deal to import 60 LNG cargoes. While Shell and TotalEnergies participated in the negotiations, neither company has officially confirmed the agreement. Sources suggest deliveries will begin in 2025.
After resuming LNG imports in 2024 due to a supply-demand gap, Egypt continues to face production declines, particularly at the Zohr field, increasing its dependence on imports. To address electricity and industrial needs, authorities launched multiple tenders in 2024. Industry reports indicate Egypt purchased nearly 20 cargoes for the latter half of 2024 via the Ain Sokhna regasification terminal. Additionally, the country redirected part of its Jordan-bound supplies to meet domestic demand.
The new agreement with Shell and TotalEnergies links pricing to the Dutch Title Transfer Facility (TTF), Europe’s key gas benchmark. This indexation allows prices to adjust with market fluctuations, providing flexibility against spot price volatility. Unlike past contracts that required payment within 180 days, this deal extends payment deadlines to one year, easing Egypt’s financial burden while ensuring stable supply.
In 2024, premiums on cargoes bound for Egypt ranged between $1.50 and $2 per MMBtu due to rising Suez Canal transit fees, higher insurance costs, and extended payment terms. Analysts emphasize the urgency of securing these shipments early to avoid potential price hikes.
According to S&P Global Commodity Insights, LNG spot prices in the Eastern Mediterranean stand at approximately $14 per MMBtu for early 2025. Analysts expect prices to rise above $16 in the spring, driven by increased demand and limited arbitrage opportunities with Asia. This tightening market could make Mediterranean cargoes more appealing to suppliers, positioning Egypt to negotiate longer-term supply agreements.
Source:energynews.pro
African Energy Council