Egyptian Consortium to Import U.S. Shale Gas: Addressing Shortages and Boosting Energy Security

Egypt’s energy landscape faces a critical challenge: a shortage in natural gas supplies that has led to temporary shutdowns of chemical factories. In response, Sidi Kerir Petrochemicals Co SAE (Sidpec) is spearheading a consortium to import U.S. shale gas, specifically liquefied ethane gas. Let’s delve into the details:

The Consortium’s Ambitious Plan

  • Who’s Involved: The consortium includes Sidi Kerir Petrochemicals (Sidpec), Egyptian Ethylene and Derivatives Co. (ETHYDCO), Gama Construction Company, Egyptian Petrochemicals Company (ECHEM), and Egyptian Natural Gas Company (GASCO).
  • Stakeholder Distribution: Sidpec will hold a 25% stake, while ETHYDCO and Gama Construction each have a 25% stake. ECHEM will hold 15%, and GASCO will hold the remaining 10%.
  • Capital and Financing: The new company, with a total capital of $663 million, will be established this year. Shareholders will finance 40% of the capital, while bank loans will cover the remaining 60%.
  • Energy Source: The focus is on importing U.S. shale gas, which will help alleviate the gas shortages and prevent further disruptions in production.

The Urgency of the Situation

  • Power Cuts and Rising Demand: Egypt’s population growth and urban development have driven up electricity demand. As temperatures soar, air conditioning usage spikes, exacerbating the strain on the power grid.
  • Import Imperative: Prime Minister Mostafa Madbouly emphasized the need to import approximately $1.18 billion worth of natural gas and mazut fuel oil to mitigate persistent power cuts caused by consecutive heatwaves.

A Vision for Energy Security

Egypt’s strategic move to import U.S. shale gas underscores its commitment to energy security. By diversifying its energy sources, the country aims to stabilize its industrial sector and ensure a reliable supply for its citizens.

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