Egypt's Tender for 20 Winter LNG Cargoes Fully Awarded

Egypt's recent tender seeking 20 cargoes of liquefied natural gas (LNG) to cover winter demand after a steep decline in domestic gas output has been fully awarded, four trading sources told Reuters.

This is the first time Egypt has issued a tender to cover winter demand since 2018. The most populous Arab country has returned to being a net importer of natural gas this year, buying more than 50 cargoes so far this year and abandoning plans to become a reliable supplier to Europe.

The tender, which was issued by the Egyptian General Petroleum Corporation (EGPC) and closed on Sept. 12, aims to cover demand for the fourth quarter of 2024 and was awarded on a six-month deferred payment basis.

"Despite the geopolitical challenges in the region and market tightness, EGPC received offers from more than 15 major players at very competitive rates that were 30%-40% less than expected market prices," a source close to the matter said.

"Offers were around a US$1-plus per million British thermal unit (mmBtu) premium to the TTF, without the financial cost, which is around US$0.60/mmBtu...this is far less than market expectation of a premium over US$2/mmBtu."

Three other trading sources said the tender was awarded at a premium of between US$1.70 and US$1.90 to the benchmark gas price at the Dutch TTF hub.

The deals are for 17 cargoes to be delivered between Oct. 4 and Nov. 29 to Egypt's floating terminal in the Red Sea port of Ain Sukhna and three cargoes to Aqaba port in Jordan.

Winners of the tender included TotalEnergies, Shell, BP and commodities traders Glencore and Gunvor. Saudi Aramco won a few cargoes, as did smaller commodities trader Hartree.

Egypt’s domestic gas output fell to a six-year low in May and is expected to drop by a further 22.5% by the end of 2028, consultancy Energy Aspects said, with power consumption expected to jump by 39% over the next decade.

Saudi Arabia and Libya have financed the purchase of gas cargoes worth at least US$200 million to help Egypt to contend with a deepening energy crisis, sources told Reuters.