- Published on Monday, 11 February 2013 12:05
- Published by Isaac Twumasi-Quantus
- Hits: 266
As Egypt’s energy industry continues to struggle, news came that the North African country’s two LNG facilities were shut-in due to a lack of feedstock. The Damietta LNG facility, operated by Union Fenosa Gas (UFG), had its feedstock for the plant diverted to supply the domestic market.
UFG, a stakeholder company shared equally between Gas Natural and ENI, said the plant was idle because Egypt was restricting supplies. "We expect the plant to come back on stream ... but it depends on the Egyptian authorities to resume the supply to Damietta," the company said in a Reuters report.
Meanwhile the East Delta Electricity Production Co., a wholly owned subsidiary of the Egyptian Electricity Holding Co. (EEHC), struck a deal to repair and finance the Damietta and Shabab power stations to help increase capacity to the national grid. The $110 million agreement to be disbursed over four years is the first syndicated Islamic financing deal in the country’s energy sector with the National Bank for Development (NBD), Banque Misr, Egyptian Gulf Bank, Baraka Bank, Bank Audi, and United Bank. NBD’s CEO and managing director Nevine Loutfy told Petroleum Africa that there was potential for further collaboration in Egypt’s energy sector. NBD said in a release that the agreement remained part of the Bank’s commitment to “support the national economy in spite of the current circumstances.”
Egypthas been facing problems meeting local energy demands as well as upholding exporting contracts. In 2009, gas exports were on the rise; however, due to an increase in domestic consumption a moratorium was placed on new export contracts and the country’s exports have decreased steadily since. Rising energy demand combined with falling output from domestic gas fields saw Egyptian LNG exports in 2012 decline to 4.7 million tons, compared with a combined export capacity at Damietta and Idku of 12.2 million tons.
According to analysts it is unlikely that UFG will restart the plant in 2013.
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