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(Bloomberg) — Egypt, which recently diverted a number of incoming liquefied natural gas shipments, is reviewing its energy import needs amid a fall in domestic power demand and a drive to trim spending.
The North African nation’s decision to not receive the cargoes came amid efforts in “updating production and consumption models according to actual figures” with the aim of “achieving the optimal and most efficient energy mix,” the energy ministry said Saturday in a statement.
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It also cited the need to reduce “the import bill as much as possible,” while saying the flexibility of contracts allows for “amending the dates of receiving previously-agreed shipments.”
Gas-producing Egypt surprised markets this year with massive LNG tenders as a scorching summer spiked electricity consumption and local output declined. Fuel purchases have continued into the cooler months, with gas production down 19% year-on-year in September, according to the Joint Organizations Data Initiative.
There’s been a recent shift in approach, however, with authorities rescheduling deliveries of several LNG cargoes from the current quarter to the next one, a person familiar with the matter said last week. Cooler weather reducing local demand for power is a factor, they said.
LNG shipments are costly for a nation that’s seen a plunge in revenue from the Suez Canal as commercial ships avoid the key waterway following Houthi attacks in the Red Sea. Lower LNG demand from Egypt frees up more cargoes for Europe, where cold weather has raised demand and prices.
It’s not clear if the postponement will affect Egypt’s plans to seek more fuel from the market for the first quarter.
The ministry also denied reports on “some websites” about problems at a floating LNG terminal at Ain Sokhna that Egypt leased this year to address acute power shortages.
“The regasification unit is operating without any issues that would hinder meeting the market’s natural gas needs,” it said.
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