Egypt’s Egas seeks LNG over October-December

Egypt's state-owned gas firm Egas is seeking 20 spot LNG cargoes for delivery over October-December through a tender that will close on 12 September.

The firm is seeking 17 deliveries to Ain Sukhna, and three deliveries to Jordan's 3.8mn t/yr Aqaba import terminal, through a tender that closes on 12 September.

This tender may create additional competition for spot LNG for European buyers. News of the tender may have contributed to a rise in European gas prices, with the front-month contract at the Dutch TTF trading at over €37.50/MWh in the morning, against an Argus assessment of €36.13/MWh on Thursday. But the TTF lost most of its gains later in the day.

Egas was last in the market to seek up to five cargoes for delivery over August-September, through a tender that closed on 29 July. This tender was likely to have been fully awarded at an average of a $1.50/mn Btu premium to the TTF, possibly to TotalEnergies, Gunvor and BP, traders said.

Traders in mid-August estimated that Egypt would seek about eight to 15 spot cargoes for winter. Its latest requirement for 20 cargoes may indicate that the country's demand for imports is leaning towards the higher end.

At the same time Egas executive managing director Magdy Galal had told Argus this February that Egypt would be able to export in winter 2024-25, "as usual". Europe was the main destination for Egyptian LNG exports in recent years. Egypt shipped 84 cargoes to Europe in the past two years, while only 35 vessels were exported elsewhere. Croatia, Greece, Italy, Poland, France, the Netherlands, Spain and the UK were among the recipients of Egyptian cargoes.

Egypt last exported LNG in April, when it delivered 209mn m³ of equivalent pipeline gas, data from the Joint Organisations Data Initiative (Jodi) show.

But Egypt's appetite for spot cargoes is likely to remain, particularly as domestic gas production in the country has been falling. Gas production in Egypt fell to its lowest for seven years in June, the latest Jodi data show. At the same time, its pipeline gas deliveries from Israel have been hit with uncertainty since the start of the Israel-Hamas conflict in Gaza. Pipeline deliveries from Israel to Egypt fell to 731mn m³ in June from 851mn m³ in May, having reached record highs earlier this year.

LNG exports from Egypt this winter are "not very likely", Italy's Eni said on 26 July.

By Rou Urn Lee and Alexandra Vladimirova