The Egyptian Natural Gas Holding Company (EGAS) has canceled an auction of three liquefied natural gas (LNG) shipments due to the low prices in global markets, reaching about $2.52 per million BTUs, excluding freight and liquefaction charges. A source in the petroleum sector told Daily News Egypt that the cost of shipping and liquefying Egyptian natural gas from the Idku plant ranges between $3-4 per million BTUs, in addition to production costs estimated at $2.65. He explained that EGAS puts an auction on the shipments of state-owned gas with a minimum price requested by the company for one million thermal units in order to cover the cost of the shipment and achieve a return to the state treasury. Furthermore, he said that the LNG supply in European markets was too high due to the increase in American and Australian gas production, which led to a decline in prices offered by consuming countries. The source pointed out that the average price of Egyptian LNG ranges from $7-8.5 per million BTUs, including the cost of liquefaction and shipping to the importer. EGAS is auctioning only its gas shipments, and the foreign partner at the Idku liquefaction plant is separately marketing the shipments. The three shipments put up at the auction were scheduled to be transferred on 9 September to 2 October, according to Reuters. The volume of natural gas exported through the Idku liquefaction plant of the Dutch Shell company is estimated at about 500m cubic feet per day (scf/day). The source explained that the quantities of gas destined for export through the Idku liquefaction plant are determined according to the available quantities of natural gas in the national grid after meeting the needs of the local market. Ownership of the Idku plant is divided among the Egyptian General Petroleum Corporation (EGPC) by 12%, the EGAS by 12%, Shell by 35.5%, Petronas by 35.5%, and Gaz de France by a 5% stake. The contractual rate of Idku plant is 1.13bn scf/day. These rates have decreased since 2011 until they finally stopped at the beginning of 2015. Egypt's natural gas output rose to 7bn scf/day against 6.8bn scf/day last month after linking the second phase of the North Alexandria wells to production along with a number of other wells.
