Egypt stops fertilizer production after Israeli gas shortages increase energy strain

Industry sources report that Egyptian fertilizer producers had to stop operations Friday because of a decline in natural gas imported from Israel.

After Israel's attacks on Iranian nuclear and missile facilities, they said that major Israeli gasfields had halted operations.

Egypt's Petroleum Ministry announced that an emergency plan had been implemented to prioritise gas allocations and cut supply to certain industries.

The ministry reported that power stations are using fuel oil at maximum levels and switching to diesel is being done to protect the stability and load of the gas grid.

Sources said that the ministry had not given a date when it might be possible to restore normal gas supply.

Leviathan, and Karish were two of Israel's major gas fields that closed on Friday. One gas analyst said that Tamar was still operational.

The Israeli Energy Ministry reported that the supply of natural gases has been disrupted, and this, amongst other things, led to temporary suspensions of exports.

The company said it would make every effort possible to restore supply as quickly as possible.

Before holding a meeting, Egyptian Prime Minister Mostafa Mdbouly stated that Cairo closely monitored the regional situation and aimed to increase its strategic stock of various commodities.

In a press release, Karim Badawi, the Minister of Petroleum, said that his ministry is working to ensure stable supplies of gas to power stations. He has already contracted gas shipments, and has stockpiled fuel oil. Work is underway to bring docked floating Storage and Regasification Units (FSRUs), which are docked, online.

According to Badawi only one FSRU has begun injecting gas in the national grid. The other two are still being prepared and connected with ports.

Madbouly stated that Egypt's combined regasification daily capacity will be 2,250 million cubic foot, which is more than twice the capacity of last year. Egypt hopes to lease a 4th unit for emergency use.

Since 2022, Egypt's own gas production has been declining. Data from the Joint Organisations Data Initiative shows that Israeli gas makes up 40-60% Egypt's total import supply and approximately 15-20% its consumption.

Egypt signed agreements this week with energy firms and traders to purchase at least 150 cargoes liquefied gas, the largest import purchases in Egypt's history. The total at current prices is over $8 billion.

(source: Reuters)