Egyptian LNG Import Terminal Deal Finalized
Egypt finalized a deal with Norway's Hoegh LNG for a long-delayed liquefied natural gas import terminal on Monday that will eventually help the power-hungry country resolve a chronic energy shortage.
However, the expected launch date for the floating storage and regasification unit was pushed back to the end of March, the latest in a series of delays over the past two years.
Liquefied natural gas shipper Hoegh signed a five-year contract with Egypt's EGAS in Cairo at an event that included Egypt's oil minister and the Norwegian ambassador.
The firm was initially looking to start up operations by the third quarter of 2014 but the project was delayed earlier this year. In September, the oil ministry said the terminal would be up and running by December.
Hoegh said the new contract was expected to generate earnings before interest, taxes, depreciation and amortisation of around $40 million a year. The firm announced its letter of intent with EGAS in May.
Egypt can export LNG but cannot import it without installing the terminal.
Egypt has been struggling with soaring energy bills caused by the high subsidies it provides on fuel for its population of 86 million. The subsidies have turned the country from a net energy exporter into a net importer over the last few years.
Reporting by Shadi Bushra and Balazs Koranyi