Over the summer months, EGAS is often forced to turn gas supplies away from industry to cover surging demand from electric power generators. A tender for a third FRSU was launched on Tuesday – additional supply will help meet next year’s peak summer demand before several domestic gas fields come onstream towards the end of 2017.
Bids for the tender can be filed over the coming ten days; schedules are tight as Egypt’s energy ministry seeks to have the FRSU in full operation in the second quarter of 2017. The third FRSU is anticipated to boost Egypt’s LNG import capacity from 34 MMcm/d to 55.24 MMcm/d.
Yet, for the current summer there’s another round of gas shortages looming. As in past years’, gas power generation gets prioritised to meet rampant demand for air-conditioning while the supply rationing for industries is crippling Egypt’s already fragile economic growth.
EGAT confirmed it already informed major industries that gas supply will be curbed – simply by saying it “requested that that they [industries]use this period for maintenance.” The state-owned gas company expects that gas demand from the country’s electricity sector will reach 3.9 billion cubic feet per day in August, up from an average 3.2 Bcf/d during the month of June.
Anything closer to 4 Bcf/d would risk causing gas shortages as Egypt’s domestic gas production is currently limited to just under 3.9 Bcf/d while another 1.1 Bcf/d can get imported.
Egypt is one of the largest markets for new-build gas power projects in the Middle East – Siemens and GE are executing major orders for large-scale plants while APR Energy puts in place decentralised onsite power solutions to bridge supply gaps. Mobile gas turbines are used as an affordable self-power solution by energy-intensive industries such as petrochemicals, mining, EPC and the oil and gas sector.
Stable gas supply is vital as these new-build power projects are coming onstream over the next years. Stepping up LNG imports is seen as a ‘quick fix’ – the more economically sustainable option will tapping domestic gas resources. High hopes are placed on the start of production from Eni’s Zohr field and BP’s Atoll field the end of 2017.