Egypt freezes gas deal talks with Qatar

“We were planning to resume the talks very soon but as you can see, the situation in Egypt is very difficult,” Taher Abdul Raheem, chairman of the state-run Egyptian Natural Gas Holding Co., or EGAS, told the Wall Street Journal.

“The talks are frozen with Qatar and we are not in a position to initiate talks with any other country,” he said, without specifying when the discussion with the Gulf country will be resumed.

Gas-rich Qatar already promised Egypt in June five free shipments of LNG, equivalent to 16 billion cubic feet, to compensate the foreign partners that have already supplied extra domestically produced gas to the North African country to avoid wider power cuts during the summer months.

The gift initially gave Egyptian officials more time to negotiate the terms of a deal agreed in principle in April to secure around 13 LNG cargoes to the overseas customers of two companies currently exporting gas from Egypt-BG Group PLC and Malaysia’s Petroliam Nasional Bhd, or Petronas. Those companies would, in turn, supply an extra 500 million cubic feet a day of domestically produced natural gas, which would otherwise have been exported, to Egypt’s government. The first cargo from the April gas-swap deal was scheduled to be shipped in May, but a disagreement over the price Egypt would pay for the gas held up the agreement.

“The free cargos came at that time as a discount on the bigger deal, and we had hoped that we could still convince Qatar to give us good prices and easy credit terms but we did not manage to resume the talks on that subject, especially when Mursi was ousted a month later,” Abdul Raheem said.

Curbs on production

Oil and gas producers in Egypt have curbed local production due to political unrest, but demand for energy has continued to grow, resulting in rolling blackouts throughout the country that have deepened public discontent.

In response, the Egyptian government last year started looking for deals to buy LNG and issued a tender to build an import terminal that would start to operate in May this year. However, those plans were cancelled, due to political and technical issues.

An Egyptian official familiar with the matter who asked not to be named said that the Egyptian government decided to give up on the Qatari LNG deal because the Gulf state supported the Mursi administration.

“We felt that Qatar won’t be as easy as it was during the reign of Mursi and the coverage of their channel Al Jazeera, for instance, is still very biased towards the Muslim Brotherhood,” the official said.

Qatari officials were not immediately available for comment. The Gulf state’s foreign minister told reporters in Paris on Sunday that his country had never given aid to Egypt’s Muslim Brotherhood and that all support went to Egypt as a whole and “still continues till date.”

Egypt has faced a natural gas and diesel shortage since last year, which has pushed up food costs, seen long lines at filling stations and electricity blackouts. The energy-supply problems have deepened popular discontent with Egypt’s former ruling Islamist government and exacerbated broader economic difficulties there.

The country is also struggling to complete oil-supply agreements with Iraq and Libya aimed at easing diesel shortages. It has been unable to provide acceptable bank guarantees that would guarantee the flow of oil, people familiar with the talks have previously said.

gulf news

8 Comments on "Egypt freezes gas deal talks with Qatar"

GregT on Tue, 20th Aug 2013 12:21 am 



The global peak oil dominoes have started to fall, and it is only a matter of time before they will all come crashing down. No country will be exempt.

There is no way to avoid the inevitable, it would be wise to plan accordingly.

bobinget on Tue, 20th Aug 2013 12:21 am 



It appears The Saudi are unable to supply N. gas to Egypt.
Saudi Arabia is fronting the Egyptian junta CRUDE oil and cash. Gas-Oil (diesel) is obviously a refined product and traditionally sold at a deep discount from government supplies. Zayt al-barafeen is subsidized and sold retail in 2012 for .18 cents a liter. Now the old joke says ‘we can make it up in volume’ but in Egypt’s case subsidies and long peaked oil are a root problem and impossible to overcome even short term.

bobinget on Tue, 20th Aug 2013 12:30 am 



The next time some US centric oil company hack writes that PO is another hoax, ask about Syria, Libya, and of course Egypt. If he poo poohs that notion, ask about the price of diesel in Saudi Arabia.

Here’s a World Bank list for reference;
http://data.worldbank.org/indicator/EP.PMP.DESL.CD

GregT on Tue, 20th Aug 2013 1:31 am 



If it wasn’t for the Zionist backed central banking system, and military industrial complex, the same would have happened to the US when it peaked back in the early 70s.

We are very quickly approaching the point where all of the monetary debt, and military might in the world, will no longer continue to keep our societies functioning.

Oil is a finite key resource, and to expect a society that relies entirely on a finite resource, to last indefinitely, is nothing more than foolish.

BillT on Tue, 20th Aug 2013 6:21 am 



“Gifts’ come with obligations … Ask any politician.

Arthur on Tue, 20th Aug 2013 6:23 am 



To sum up the article: Qatar is currently the center of the MB uprising and has cash. Now that Morsi is gone, Qatars goodwill towards Egypt is gone as well. The US understood the true intentions of Qatar, Egypt and Turkey in the Syrian drama simply too late and saw itself forced to pull the emergency break and gave the nod to the Egyptian military to topple Morsi. The insane idea of the zionist core strategy to destroy Syria, just to weaken the position of Iran, has backfired immensely, and now essentially the US has no strategy anymore in the ME. The US is now forced, oh irony, to keep Assad in the saddle, if it wants to keep any position at all in the ME. But it is already too late, the forces of Sunni fundamentalist Islam are already unleashed and the endgame for the MB/jihadists will be to get rid of the ‘House of Saud’ and get hold of the resources of KSA to fund wellfare programs, of which poor Egypt will be the main beneficiairy. Expect major clashes between the MB and Tehran-Bagdad over who will own the Shia majority eastern oil provinces in KSA. This could easily lead to war between Turkey and Iran. The fall of Assad, which is going to happen anyway in the coming years with a delay, will prompt Turkey to expand southwards and support a MB takeover of Riyahd. Turkish tanks in the KSA will mean the end of the petrodollar.

One thing is clear: no person will be missed more in Washington the coming years than Saddam. The KSA will never forgive the invasion of 2003 because it means the end of the KSA itself.

Arthur on Tue, 20th Aug 2013 9:23 am 



http://en.wikipedia.org/wiki/Governmental_positions_on_the_Iraq_War_prior_to_the_2003_invasion_of_Iraq#Saudi_Arabia

“Pre-war, Saudi Arabia’s public position had been one of neutrality in the conflict… despite numerous American attempts, Saudi Arabia would not offer the American military any use of its land as a staging ground for the invasion of Iraq… no proof that there is a threat imminent from Iraq, I do not think Saudi Arabia will join in… Officially, Saudi Arabia wished to see Saddam Hussein and the Ba’ath regime go, but feared the aftermath… ***Saudi Arabia worried about the possibility of an Iraqi Shia pro-Iranian government installed at its doorstep, following the demise of Saddam’s Sunni regime*** … the contradiction and ambiguity of the Saudi position reflected the regime’s desperation both to appease Washington and not be seen providing a territorial base for the US attack”.

Very prescient, these fundamentalist Sunni Saudis. Now their position is so precarious that they have to support a half secular military Egyptian junta suppressing a Sunni fundamentalist grass roots movement. No wonder one of the Saudi ‘princess’ defected from The Family. Endgame conditions.

BillT on Tue, 20th Aug 2013 11:48 am 



All too correct, Arthur.