Egyptian consortium to import U.S. shale gas to tackle short gas supplies
DUBAI, July 1 (Reuters) - One of Egypt's largest petrochemicals companies plans within a consortium to import U.S. shale gas to address a shortage in natural gas supplies that forced several chemicals factories to temporarily shut down twice in June.
Sidi Kerir Petrochemicals Co SAE (Sidpec) said in a bourse disclosure on Monday that it will hold a 25% stake in a $663 million company that will be established this year through a consortium to import U.S. shale gas, liquefied ethane gas.
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Sidi Kerir is one of several major companies in the fertilisers and chemicals sector that had to halt production after suffering from short gas supplies that coincided with a worsening of regular blackouts that Egyptians have experienced since last year, due to a surge in summer power consumption and the shortage of gas.
The consortium also includes Egyptian Ethylene and Derivatives Co. (ETHYDCO) and Gama Construction Company with a 25 percent stake each, while Egyptian Petrochemicals Company (ECHEM) will hold a 15 percent stake, with Egyptian Natural Gas Company (GASCO) holding the remaining 10 percent.
Some 40% of the capital, which would be spread out over three phases, will be financed by shareholders with the other 60% financed through bank loans.
Supplies of the natural gas that helps Egypt generate electricity have been dwindling at a time when an expanding population and urban development have been pushing up electricity demand. When temperatures rise, air conditioning use drives up power consumption.
Egypt needs to import around $1.18 billion worth of natural gas and mazut fuel oil to end persistent power cuts exacerbated by consecutive heatwaves, its Prime Minister Mostafa Madbouly said last month.
Abu Qir Fertilizers, another major Egyptian company that halted production due to the shortage, said it would partially switch to hydrogen supplies.
(Reporting by Nayera Abdallah; editing by David Evans)