Egypt’s Petroleum and Minerals Minister Addresses Decrease in LNG Exports and Expectations for Recovery

Seasonal Factors Cause Halt in Egypt’s Liquefied Natural Gas Exports in June

Egypt’s Petroleum and Minerals Minister Tarek El-Molla told Reuters on Wednesday that Egypt did not export any amount of liquefied natural gas in June due to seasonal factors, including high domestic consumption, adding that he expects exports to pick up again this month.

Trade sources had told Reuters they believed the halt in exports in June was the result of falling domestic production.

But El-Molla said there was no “special reason” and added that high summer temperatures increase the demand for gas for cooling.

Market Prices and High Domestic Demand Lead to Low Exports

“The market prices are very low… (also) we usually don’t export (gas) during the summer due to the high domestic demand due to the heat,” Al-Mulla said on the sidelines of an industry conference oil and gas industry.

Egypt, the largest Arab country in terms of population, it began importing gas from Israel in 2020 as part of its bid to become an energy hub in the region, where it can, due to its strategic location, supply domestic and Israeli gas after liquefying it to Middle Eastern countries, of Africa and Europe.

Last year, Egypt signed a framework agreement with the European Union and Israel to expand gas exports, in one moment in which Europe was trying to find alternatives to Russian gas after the outbreak of the Ukrainian war.

Egypt went from a importer of gas to an exporter in late 2018, thanks to the rapid growth of its supplies, supported by the discovery of the largest gas field in the Mediterranean.

Egyptian exports of natural gas have reached the level record of 8 million tons in 2022.

It is expected that questexports will reach 7.5 million this year tonwith most of it going to Europe and Turkey and the rest to Asian markets.

The Egyptian LNG export terminals on the Mediterranean coast are in capable of shipping 12 million tons annually, a number the country seeks to reach in 2025 and would place it among the largest exporters of LNG.

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