Hoegh Evi signs a 10-year contract to supply floating LNG to Egypt amid an energy crisis

Hoegh Evi, a Norwegian company, has signed a time charter agreement for ten years with Egypt's EGAS, a state-owned gas firm, to deploy a FSRU (floating storage and regasification units) in the Port Sumed before the end of 2026. The country is scrambling to secure its gas supply amid mounting shortages at home.

The Hoegh Gandria, which was purchased in 2023 as a liquefied gas carrier, will be converted into a high capacity FSRU, capable of delivering 1 billion standard cubic foot per day. The Hoegh Gandria will replace the interim Hoegh Galleon which arrived in Egypt on July 20, 2024. It will stay in Egypt until early 2027, before moving to Port Kembla in Australia.

Egypt is rushing to increase its LNG import capability in response to declining domestic gas production.

According to the Joint Organisations Data Initiative, output fell from 4.6 million cubic metres in January of 2024 to only 3.3 million cubic metres in February of 2025 - the lowest level since April 2016.

Egypt operates one FSRU in Ain Sokhna, and a second is expected to be operational mid-2025. There are ongoing talks with U.S. based Excelerate Energy as well as German authorities about leasing additional regasification unit.

Moataz Atef, spokesperson for the Petroleum Ministry, told reporters in April that Egypt hopes to have 3 or 4 FSRUs available by summer.

In February, Egypt signed LNG supply agreements worth $3 billion with Shell and TotalEnergies for domestic demand in 2025. The country is also looking at long-term LNG contracts to reduce its reliance upon more expensive spot market purchases.

According to an Egyptian Petroleum Ministry statement, Egypt and Qatar met on Monday to discuss the signing of long term contracts for the supply natural gas by Qatar. "This will help to secure gas supplies in order to meet domestic demand," the statement said.

Egypt is trying to establish itself as an energy hub in the region, but its chronic gas shortages have forced it to import more than it exports. It also has to rely on external funding to cover its domestic needs. Egypt recently signed agreements with Cyprus for the export of Eastern Mediterranean gas via its liquefaction facilities. (Reporting and editing by David Evans; Mohamed Ezz)

(source: Reuters)