Rosneft signs LNG deal with Egypt for 10 cargoes this year
Russia’s largest crude producer, Rosneft joined traders from Trafigura Group to Glencore in boosting liquefied natural gas deliveries to Egypt before the country restores domestic production.
Rosneft, which seeks to expand its international gas business, signed a contract to supply the north African nation with 10 LNG cargoes this year, Rosneft said yesterday by email. The deal, which followed a debut contract of three cargoes last year, will further strengthen the strategic partnership between Rosneft and Egypt, the company said.
Egypt, Africa’s largest gas market, was forced to turn to imports two years ago as domestic production shrank at the same time as electricity demand is rising. The country plans to purchase more than 100 LNG cargoes this year, including as many as 45 cargoes via government-to-government contracts from Rosneft, Oman and France’s Engie, a person familiar with the matter said last month.
The north African nation is targeting a reduction in iorts next year, moving back to self-sufficiency or even exports after the planned commissioning of two major gas projects. Rosneft seeks to join one of them, the giant Zohr field, after it agreed to buy a share in the development from Italy’s Eni, the project’s main owner.
Egypt plans to boost gas output by 50% by the end of next year from 3.8bn cubic feet by the end of 2016. It targets a resumption of exports in 2019.
Rosneft has long sought to build up its gas business. It overtook Novatek to become Russia’s second-largest producer last year, but it has no LNG facilities of its own. Last year’s cargoes for Egypt, the first-ever LNG deal for the company, were bought on the open market. Rosneft is mulling building an export plant near Russia’s Pacific coast no earlier than 2023. It is also considering a Venezuelan LNG project.
The LNG deliveries to Egypt will start in May, Rosneft said.