Egypt, BW Group Sign FSRU Deal

Egypt has inked a five year agreement to lease its second FSRU, country’s Petroleum Ministry said Tuesday.

The agreement was signed between the Egyptian Natural Gas Holding Company (EGAS) Chairman Khaled Abdel Badie and the Norway-based BW Group CEO Carsten Mortensen Monday.

BW’s state-of-the-art FSRU BW Singapore built at Samsung Heavy Industries in Korea will be utilised for this project. The FSRU will be delivered by end September 2015 in Ain Sokhna Port and will commence operations in October 2015. It has a storage capacity in excess of 170,000cbm and a peak regasification capacity of 750 mmscfd.

The Egyptian economy is facing severe gas shortage as local demand has ballooned in recent years amid declining domestic production. The government has been trying to procure LNG from various sources to cater to growing demand.

Last month, Egypt's EGAS issued tender to buy 45 cargoes of LNG for delivery in 2015-16. The deliveries would take place between October 2015 and December 2016.

This will be Egypt's second floating unit. Earlier this year, Hoegh Gallant FSRU from Norway's Hoegh LNG commenced commercial operations. The FSRU arrived in Egypt on the Gulf of Suez in early April. In November last year, Hoegh LNG finalised a five year deal with EGAS to supply FSRU by the end of first quarter of 2015.

Höegh LNG had signed a Letter of Intent (LOI) with EGAS in May last year for the use of one of its FSRU as an LNG import terminal in the port of Ain Sokhna, located on the Red Sea's Gulf of Suez. The FSRU was scheduled to start operations in the third quarter of 2014 but was delayed.