Natural gas production in Egypt, which has seen a massive new gas field come on stream in the Mediterranean in recent years, has plunged to the lowest level in about six years, as the North African country is now importing LNG to meet growing demand.
Egypt's natural gas production fell in May to the levels last seen in February 2018, according to data from the Joint Organisations Data Initiative (JODI) cited by Bloomberg.
Egypt has been exporting LNG to Europe, but it usually halts these exports during the summer months, to meet soaring electricity demand in scorching temperatures as most of its electricity output comes from gas-fired power plants.
This year, early summer heat waves have made the situation in the country more difficult, and rolling power cuts have been enacted to conserve energy until contracted LNG cargoes arrive to save the day.
At the beginning of the summer in June, Egypt was looking to import in the coming months the highest number of LNG cargoes in years, to help it ease the strain on its grid and industry amid energy shortages that have led to rolling blackouts.
In June, Egyptian Natural Gas Holding Co, the state gas company, was seeking to purchase at least 17 LNG cargoes for delivery over the next three months.
Egypt, which aims to become a regional gas hub, has been exporting LNG to Europe from its terminals on the Mediterranean with gas from domestic production and from fields offshore Israel. However, Egypt rarely exports LNG in the summer months, due to high domestic power demand in the heat waves.
Earlier this year, Egyptian Natural Gas Holding sought to lease a liquefied natural gas import terminal from providers of FLNG units to get ahead of the scorching summer season that routinely triggers power blackouts due to the heavier load.
As some LNG cargoes have already arrived, Egypt will halt the power cuts as of July 21, Prime Minister Mostafa Madbouly said earlier this week.
By Charles Kennedy for Oilprice.com
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