Egypt Permits Private Sector to Import Natural Gas

Source: Reuters 5/21/2015, Location: Africa

Egypt has given the private sector a green light to import natural gas or liquefied natural gas (LNG), a government official said, a step that could encourage private investment in the energy sector while easing energy shortages.

Declining energy production, held back by a lack of investment, has helped turn Egypt from an energy exporter to a net importer over the past few years and contributed to a persistent energy crisis.

Egypt has tried to address energy shortages by signing a raft of LNG import deals this year, but allowing the private sector to import gas as well could further boost supplies of gas, which is used to power most Egyptian homes and factories.

The chairman of state gas board Egyptian Natural Gas Holding Company (EGAS) said officials had decided to allow private companies to import gas through state infrastructure.

"EGAS and the (state-owned) Egyptian General Petroleum Corporation (EGPC) approved this week to let others (private companies) use the state-owned national gas network in transferring and marketing the gas," Khaled Abdel Badie told Reuters by phone.

In exchange, the state will get a tariff for transferring the gas through its infrastructure, he added.

Egypt's Oil Minister Sherif Ismail asked EGAS and EGPC to set regulations for allowing the private sector to import gas for the local market, until the creation of a regulatory body for natural gas.

Abdel Badie declined to discuss how much the tariff on private importers would be, but he said EGAS had hired a technical consultant from the European Union to help form the regulations.

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