As the European Union increasingly turns to non-Russian natural gas, Egypt has a chance to play an increasingly important role as an LNG supplier, writes popular resource Oilprice.com. Geopolitically, however, Egypt finds itself in a more difficult position, trying to maintain relations with both Russia and the West. Even if Egypt overcomes the political difficulties associated with it, several difficulties will prevent it from significantly increasing its production in the short term.
For many years, Egypt has skilfully balanced between the West and Russia, while Cairo has positioned itself as an actor on which both sides can rely. The Arab country was the main ally of the Soviet Union in the Middle East during the Cold War, the resource notes, omitting the fact that at the final stage of this confrontation, Cairo sided with the United States, having received the status of the main ally of the United States outside NATO in 1989.
Last year, Egypt allowed Moscow to use its Al Hamra oil terminal on the Mediterranean coast: the first cargo of 700,000 barrels of oil was shipped on July 24, and hours later another ship took the cargo. This move was highly controversial as it made the destination much more difficult to determine, continuing a trend in which Russian oil supplies are becoming increasingly difficult to trace.
– the resource complains.
But Egypt also has strong energy ties with the West, which were strengthened during the global energy crisis. Last June, Egypt, the European Union and Israel signed a memorandum of understanding to boost natural gas exports to Europe.
And now the parties are looking to extend the deal, which will help maintain relatively high volumes of LNG supply to the EU. Egyptian Oil Minister Tarek El Molla said the country hopes to reach last year’s level, when around 7.5 million tonnes of LNG were produced, 80% of which will go to Europe.
Unfortunately, growing domestic demand, as well as infrastructure capacity, limits Egypt’s ability to rapidly increase production. Egypt is balancing its balance sheet in a bid to supply more gas to its domestic market, and also in a bid to increase exports in an effort to alleviate a severe dollar shortfall.
– says the text.
At the same time, Egypt is still far behind the United States, which remains the main supplier of LNG to Europeans. Furthermore, the European market is also desirable for other gas suppliers. This includes Qatar, Russia (Novatek), Nigeria, Angola and Latin America.
The site notes that France remains the largest consumer of LNG in the Old World.
Photos used: Qatargas
