Archive for Egyptian Natural Gas Holding Company

Egypt has announced that it has changed from a gas-exporting to a gas importing country based on a decision issued by the Petroleum Minister that went into effect on 17 December.

The decision was published in the Official Gazette on Monday.

According to the ministerial order, the Egyptian Natural Gas Holding Company would either import the gas itself from international markets or via contracting companies. The gas would be transferred via national networks with necessary approvals.

Petroleum expert Medhat Youssef said the decision was “unprecedented,” especially as Egypt would import gas from international companies in Qatar, not the Qatari government. The import price is expected to reach US$14 per 1 million thermal units, whereas the government sells gas to factories for no more than $4.  

The Egyptian government exports gas to Jordan at $5.50 per one million units, while Qatar exports it at more than $9, Youssef said, arguing that Egypt administers its petroleum supply poorly and should reconsider prices.  

Importing gas at international prices would affect industries such as cement and fertilizer production.  

Meanwhile, Hany Suleiman, former Petroleum Ministry deputy for gas affairs, said gas production in Egypt does not meet demands, referring to expectations that the deficit would reach 3.7 billion cubic feet by 2018.

Daily consumption, according to Suleiman, will double by the fiscal year 2014/2015 reaching 25 million cubic feet, compared to around 12 million cubic feet in 2011/2012.

Importing gas requires infrastructure and facilities that would cost around $600 million to develop.

Edited translation from Al-Masry Al-Youm

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 Egypt’s state-owned Egyptian Natural Gas Holding Company (EGAS) has postponed by three months the closing date for international companies to present bids for 15 oil and gas concessions due to weak interest in the tender.
EGAS has pushed back the deadline for bidding to Feb. 13 from Nov. 14, according to the company’s website. EGAS announced the bidding in June for the exploration blocks in

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The Egyptian Natural Gas Holding Company (EGAS) has reduced gas supplies to energy-intensive factories due to maintenance of gas fields in the Nile Delta that will end in mid November, the financial newspaper Al-Mal reported Tuesday.

The paper cited EGAS Chairperson Sherif Soussa as saying that the maintenance process has halted supplies from the Borllos fields and others belonging to the Pharaonic Petroleum Company in the Nile Delta.

Orascom Construction Industries on Monday said the Egyptian Fertilizers Company has stopped two production lines due to "the suspension of gas supplies."

Egypt, a modest gas exporter, has seen an energy crisis since last summer. It stopped exporting across its eastern borders due to increasing local demand and repeated bombings of the chief gas export pipeline in Sinai.

The paper reported that EGAS last month also reduced its gas supplies to factories and attributed the suspension to maintenance in the Nile Delta.

Egypt has started talks to import gas from Qatar and Algeria and invited tenders to explore oil and gas close to the country's northern borders.

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Dana Gas starts output in Egypt

DUBAI –– Dana Gas said on Saturday its Egyptian affiliate had started commercial output at a natural gas liquids plant in the North African country, with the first propane cargo loaded on 1 October.

The Egyptian Bahrain Gas Derivatives Company is a joint venture between Dana's subsidiary Danagaz Bahrain, the government-owned Egyptian Natural Gas Holding Company and Arab Petroleum Investments Corp.

The Ras Shukheir plant will have a production capacity of 120,000 tons a year of propane and butane using gas feedstock supplied by Egyptian General Petroleum Corporation.

Dana said the project cost 460 million UAE dirhams (US$125.24 million), funded through a 318 million durhams of project finance and 105 million durhams of equity.

Dana Gas said the plant will market butane inside Egypt and export propane. Residual gas will be supplied to Egypt's national gas grid.

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Cairo Criminal Court sentenced on Thursday former Petroleum Minister Sameh Fahmy and businessman Hussein Salem to 15 years in prison for their involvement in Egypt's gas deal with Israel.

The court also handed down several other prison sentences: 10 years for former Chairman of the Egyptian Natural Gas Holding Company (EGAS) Mohamed Ibrahim Youssef, seven years for three former senior Petroleum Ministry officials and three years for another ministry official.

Egypt has an extradition request pending for Salem, who was arrested in Spain last June.

State-run news agency MENA reported that the court also imposed a total of US$2.3 billion in fines on the defendants.

The trial on charges of financial corruption, squandering public funds and harming national interests began in May last year.

The prosecution argued that the suspects ordered gas exported to Israel at prices well below international standards and negotiated an inequitable contract for Egypt. The prosecution said the state had lost the equivalent of US$714 million in the deal.

The 2005 agreement stipulated that Egypt would provide Israel with 1.7 billion cubic meters of gas annually for 15 years.

In April, Egypt halted gas flow to Israel after repeated attacks on a Sinai pipeline since the 2011 revolution.

Edited translation from MENA

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The Petroleum Ministry has obtained approval from the Defense Ministry for the Egyptian Natural Gas Holding Company (GASCO) to offer a tender for international companies to explore for gas in the Mediterranean Sea for the first time, in four areas near Egypt’s eastern border with Israel.

Petroleum Ministry sources said the Defense Ministry received details of the exploration areas in order to protect investments in the gas project, which GASCO has valued at US$4 billion.

The sources added that some of the new areas touch the maritime boundary line that was previously established between Egypt and Israel, and that the exploration is consistent with international law and the high seas demarcation treaty that Egypt and most United Nations member states signed in 1983.

“The tender will be offered this week,” said Petroleum Minister Abdullah Ghorab.

GASCO Chairman Mohamed Shoaib said the region is rich with natural gas. “The tender would increase our production and serve our development plans,” he said.

The United States Geological Survey estimates the gas reserves of that region at 223 trillion cubic feet, while the Egyptian government official quantities announced are 76 trillion cubic feet, which means three times more gas may be there than the government has believed. “We shall therefore offer more tenders in the coming three years,” explained Mostafa Bahr, GASCO’s vice president for exploration.

Ramadan Abul Ela, a professor of petroleum engineering at Pharos University in Alexandria, said this was a good step, although it came late. “Neighboring countries like Lebanon, Israel and Cyprus have increased exploration and plan to enter into military and political partnerships to secure gas discoveries in the Mediterranean,” he said.

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The Petroleum Ministry has obtained approval from the Defense Ministry for the Egyptian Natural Gas Holding Company (GASCO) to offer a tender for international companies to explore for gas in the Mediterranean Sea for the first time, in four areas near Egypt’s eastern border with Israel.

Petroleum Ministry sources said the Defense Ministry received details of the exploration areas in order to protect investments in the gas project, which GASCO has valued at US$4 billion.

The sources added that some of the new areas touch the maritime boundary line that was previously established between Egypt and Israel, and that the exploration is consistent with international law and the high seas demarcation treaty that Egypt and most United Nations member states signed in 1983.

“The tender will be offered this week,” said Petroleum Minister Abdullah Ghorab.

GASCO Chairman Mohamed Shoaib said the region is rich with natural gas. “The tender would increase our production and serve our development plans,” he said.

The United States Geological Survey estimates the gas reserves of that region at 223 trillion cubic feet, while the Egyptian government official quantities announced are 76 trillion cubic feet, which means three times more gas may be there than the government has believed. “We shall therefore offer more tenders in the coming three years,” explained Mostafa Bahr, GASCO’s vice president for exploration.

Ramadan Abul Ela, a professor of petroleum engineering at Pharos University in Alexandria, said this was a good step, although it came late. “Neighboring countries like Lebanon, Israel and Cyprus have increased exploration and plan to enter into military and political partnerships to secure gas discoveries in the Mediterranean,” he said.

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The insurance policy for the natural gas pipeline built to export Egyptian natural gas to Israel and Jordan will continue despite the cancellation of the export deal with Israel, an official with the Misr Insurance Company said Thursday.

Ahmed Shawky, a board member of the East Mediterranean Gas Company, an international consortium that purchases and re-sells the natural gas, told Al-Masry Al-Youm that Misr Insurance would only cancel the insurance policy if the company operating the line, the Egyptian Natural Gas Holding Company (GASCO), stopped paying its premiums.

Factories continue to have insurance policies even after they halt work to guarantee compensation in case of damages, he offered as a comparison.

Shawky refused to reveal the exact sum Misr Insurance paid in compensation for the 14 bombings of the pipeline since the 25 January uprising last year, but said LE2 billion was paid out in 2011.

GASCO would not likely cancel the insurance policy because gas is not a stagnant commodity and can be sold to any other country, he added.

GASCO announced Sunday that it had stopped providing gas to the East Mediterranean Company as the latter had failed to meet its financial obligations according to the contract.

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Monday’s papers manage to find consensus in their coverage of the controversial issue of Egypt’s gas export deal with Israel amid the fierce competition between presidential candidates.  

State-run Al-Akhbar paper leads with the headline: “Egypt cancels natural gas deal with Israel.”  

The paper quotes Mohamed Shoeb, head of Egyptian Natural Gas Holding Company, as saying, “The company annulled the contract with East Mediterranean Gas Company [which ships gas to Israel] due to violations of contractual obligations.”

In response to the unexpected move, the Ampal-American Israel Corporation, a partner in EMG, says it regards the decision as unlawful and demands its cancellation. The report adds that the EMG is considering resorting to legal action by appealing the decision.

Since the downfall of former President Hosni Mubarak last year, the 2005 Egypt-Israel gas deal has provoked strident criticism for offering gas at too low prices. The Egyptian gas pipeline to Israel and Jordon has undergone a series of attacks by militants since the 25 January uprising.

Independent Al-Dostour runs an exclusive story on its front page about Mansoura University students’ attack on Mohamed Morsy, the Brotherhood’s presidential candidate, and Khairat al-Shater, who was the group’s nominee before the Presidential Elections Commission excluded him the race.

The newspaper reports that clashes erupted between Brotherhood youth and university students after the latter threw stones, chairs and empty water bottles and chanted slogans against the Islamist group, rejecting its policy and Morsy’s nomination.

Freedom and Justice, the Muslim Brotherhood’s mouthpiece paper, does not mention the incident. Instead, it allocates an entire page to shedding light on Morsy’s successful presidential campaign, which kicked off Sunday in Beheira Governorate.

Photos of the group’s supporters mobilizing for the rally and holding flags to welcome the candidate dominate the page.   

The sit-in for the third day of supporters of former presidential candidate Hazem Salah Abu Ismail is still making headlines in Monday’s newspapers.

Independent Al-Shorouk writes that supporters of the ultraconservative Salafi preacher clashed with citizens because the former paralyzed Tahrir Square’s traffic to protest his exclusion from the upcoming election.

They have held several marches demanding an end to military rule, the amendment of Article 28 of the Constitutional Declaration and the dissolution of the Presidential Elections Commission, which decided to disqualify him.

Abu Ismail was among the front-runners struck off the electoral roll because of accusations that his late mother had dual nationality. A law issued after Mubarak’s ouster states that presidential candidates must have Egyptian nationality only and that their parents and spouses should not hold any other citizenship than Egyptian.

As the tone of presidential race sharpens, state-owned Al-Ahram publishes in a one-page spread an opinion poll conducted by Al-Ahram Center for Political and Strategic Studies. The poll found that Amr Moussa, former foreign minister under Mubarak, came first with the support of 40 percent of those surveyed.

Moderate Islamist Abdel Moneim Abouel Fotouh ranked second in the poll and former Prime Minister Ahmed Shafiq came in third.

The poll found that Abu Ismail’s exclusion prompted 25.8 percent of his followers to support Abouel Fotouh, while 35.6 percent of former spy chief Omar Suleiman’s followers would likely cast their votes for Moussa, according to the report.   

Party paper Al-Wafd states that the Egyptian Football Association officially announced on Sunday that Egypt’s cup will be halted for the time being.

A massacre took place on 1 February in Port Said following a match between Ahly and Masry football teams, leaving 74 dead and hundreds injured.

The Interior Ministry said in its letter to the association that the cup is suspended until the suspects have been trial and security measures are stepped up in stadiums.

Egypt's papers:

Al-Ahram: Daily, state-run, largest distribution in Egypt

Al-Akhbar: Daily, state-run, second to Al-Ahram in institutional size

Al-Gomhurriya: Daily, state-run

Rose al-Youssef: Daily, state-run

Al-Dostour: Daily, privately owned

Al-Shorouk: Daily, privately owned

Al-Wafd: Daily, published by the liberal Wafd Party

Youm7: Daily, privately owned

Al-Tahrir: Daily, privately owned

Freedom and Justice: Daily, published by the Muslim Brotherhood's Freedom and Justice Party

Sawt al-Umma: Weekly, privately owned

Al-Arabi: Weekly, published by the Nasserist Party

Al-Nour: Official paper of the Salafi Nour Party

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An Israeli envoy left Cairo for Tel Aviv on Monday following an hours-long visit on the heels of Egypt's decision to stop supplying gas to Israel.

Airport sources said the envoy met with several Egyptian officials and discussed the repercussions of terminating the gas exports and the impact the move will have on the future of relations between the two countries.

Mohamed Shoeib, head of the Egyptian Natural Gas Holding Company, confirmed that the contract with East Mediterranean Gas Company — which provides Israel with natural gas — was terminated because the latter failed to fulfill contractual obligations.

An Israeli TV channel said Egypt informed EMG of the termination, and the channel called it a "strike" at the 1979 peace treaty between Egypt and Israel.

News analysts have suggested that Egypt's decision may be intended to put pressure on the Ampal-American Israel Corporation, which recently decided to sue the Egyptian government for not abiding by the terms of the gas deal.

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