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Algeria & Egypt's Sisi Talk Security, Gas Shipments

Source: Reuters 6/25/2014, Location: Africa

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Algeria agreed to ship five cargoes of liquefied natural gas to Egypt before the end of the year, a source at Algerian state energy firm Sonatrach said, helping its north African neighbour with its worst energy crunch in years. The offer of five 145,000 cubic metre cargoes was made after a visit by Egyptian President Abdel Fattah al-Sisi to Algiers, his first trip abroad since taking office. Sisi was seeking Algeria's support to counter Islamist militancy and cooperation on the chaos in neighbouring Libya.

"We did not reach a deal on pricing yet, but it is almost a deal," the source said of the agreement, which is part of talks over supplying Algerian gas for Egyptian power stations.

Egypt's oil ministry spokesman Hamdy Abdel-Aziz said he did not have any information on the status of the negotiations between the two countries, which began early this year.

The two north African countries both have long borders with Libya where, three years after the fall of Muammar Gaddafi, a weak central government is struggling to contain Islamist militants and brigades of former rebels and militias.

Sisi, who was in charge of the army when it forced Egypt's Islamist President Mohamed Mursi from power after mass protests, has been criticised by many countries for a heavy-handed crackdown on dissent. But Egypt's strategic position still makes it an important security partner for the West.

Egypt's steadily declining gas production and foreign firms' wariness about any increasing investment have combined with price subsidies and rising consumption to create the country's worst energy crisis in decades. The country of 85 million relies heavily on gas to generate power for households and industry. Previously unheard of winter power cuts this year emphasised the extent of the crisis.

Egypt has been scrambling to secure natural gas supplies, which its mainly oil-producing Gulf Arab allies cannot provide. Saudi Arabia, the United Arab Emirates, and Kuwait have given $6 billion in petroleum products since the army ousted Islamist President Mohamed Mursi last summer.

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