CAIRO Feb 3 Egypt's energy woes are likely to
worsen in the next fiscal year as gas production fails to meet
surging domestic demand, according to government estimates.
The petroleum ministry has forecast that gas production will
be 5.4 billion cubic feet (bcf) per day and consumption 5.57
bcf/day in the fiscal year that begins July 1.
In the current fiscal year by comparison, gas production is
still estimated to exceed consumption at 5.31 bcf/day versus
4.95 bcf/day, a ministry source said.
The military-backed interim government, installed last year
after the overthrow of elected President Mohamed Mursi, faces
the possibility that Egypt's fuel shortages and power blackouts
Trade and Industry Minister Mounir Fakhry Abdel Nour said
last week that domestic supplies of oil and gas were
"insufficient to cover the needs of Egyptian industry and
The growing population of 85 million and generous subsidies
have kept energy demand increasing to the extent that it has cut
into exports of liquefied natural gas (LNG) previously promised
to foreign firms.
Egypt has two LNG plants, Damietta and Idku, for converting
gas into liquid for transport by ship, and a gas export
Output from the BG Group-operated Idku plant has
declined steadily over the past year, and Gas Natural Fenosa's
Damietta facility has been idle since 2012.
BG Group last month declared force majeure on exports from
Egypt after the government broke its promise to divert no more
than half of the plant's contracted gas.
Making matters more difficult, exploration companies are not
developing untapped finds in Egypt's gas-rich waters, because
the amount the government pays them barely covers their
Officials said in November that the government was in talks
to revise the prices it pays to buy gas from foreign companies.
A $250 million project to install a floating terminal to
import LNG was launched in 2012, with the intention of boosting
Egypt's gas supplies and easing shortages.
But confusion over the terms and which state agency was
responsible for the project led to the cancellation of several
tenders to pick a floating terminal provider. The government has
still not picked a provider.