Egypt to put squeeze on Qatari LNG volumes

Egypt was one of four countries to cut diplomatic ties with Qatar in June because of its alleged support for terrorist groups. Cairo currently relies heavily on Qatari LNG imports to make up its shortfall in domestic gas production. Related analysis: LNG trade disruption worries ease as Qatari flows to Suez, Egypt resume In 2016, Egypt imported 7.32 million mt of LNG, of which 4.42 million mt or 60% was sourced from Qatar. However, Egypt believes that rising domestic production will allow it to return to gas self-sufficiency in 2018/19, ending the need for LNG imports altogether. Given the diplomatic crisis with Doha, it looks as if Qatari volumes will be squeezed first, as both Cairo’s gas import requirements and political strategy prove complementary. Earlier this year, the government announced that state gas company EGAS had contracted with Russia’s Rosneft, France’s Engie and Oman’s OTI for 45 cargoes of LNG, implying a significant fall in Qatar’s share of the Egyptian LNG import market this year. At the same time, EGAS has begun talks with suppliers over deferring 40 out of 70 contracted LNG shipments next year, before imports are completely halted. In December, the government canceled a tender for a

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Source: CTRM Center

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