Egypt may have just issued its last LNG tender, setting the stage to resume exports next year.
“I don’t think there will be more tenders beyond this, I think this is it,†El-Molla said Saturday in an interview in Vienna.“Local production should cover our needs.â€
The giant Zohr field will increase gas production to 1.7 billion cubic feet a day by August from 1.2 billion cubic feet, the energy minister said. Egypt’s total output is 6 billion cubic feet a day, and that should increase to 6.5 billion by September, he said.
Once it has a sufficient surplus, Egypt will start compensating companies that have rights to operate the country’s LNG export terminals, including Royal Dutch Shell Plc and Union Fenosa SA, El-Molla said. Egypt expects to attract $10 billion both this year and next year in foreign investment in its oil and gas industry, he said.
“First thing we will do once we have a surplus, we will supply our partners with some of those quantities,†he said. “So many years have been passing without them getting the quantities they were supposed to receive so this is one of our priorities once we have a surplus.â€
The country has also adopted a flexible gas-pricing formula to encourage investment and boost supply, El-Molla said. Egypt previously paid a fixed price of $2.65 per thousand cubic feet, and the price now is in the range of $3 to $5.88, he said. A regulatory authority was set up about two months ago and is now working on setting up a tariff system for private companies to use the state’s gas infrastructure and to license them to trade gas, he said.
