Latest news with #MarwaRashad
Yahoo
22-05-2025
- Business
- Yahoo
Exclusive-Egypt in talks to buy 40-60 LNG cargoes amid energy crunch, sources say
By Mohamed Ezz and Marwa Rashad CAIRO/LONDON (Reuters) - Egypt is in talks with energy firms and trading houses to buy 40-60 cargoes of liquefied natural gas (LNG) amid a worsening energy crunch ahead of peak summer demand, three sources aware of the matter told Reuters. The country faces spending up to $3 billion at current prices to secure the LNG, squeezing government coffers already under strain to keep the lights on amid falling gas production and a cost of living crisis. President Abdel Fattah al-Sisi on Wednesday directed the government to "preemptively take whatever needs necessary to ensure stable electricity flow," according to a statement. "The government is now in talks to import at least 40 LNG cargoes and around 1 million tons of fuel oil," an industry source familiar with the matter told Reuters. "Gas was the primary focus, given the more flexible payment options available compared to fuel oil, though the latter remains under consideration if LNG prices are unfavourable," the source added. In the past two years, Egypt endured rolling blackouts as natural gas supply fell short of demand. Egypt's own gas output in February hit its lowest level in nine years. The world's most populous Arab country returned to being a net importer of gas last year, buying dozens of cargoes and abandoning plans to become a supplier to Europe as its production tumbled. Egypt's hard currency crunch has delayed payments to international oil firms, curbing exploration and slowing oil and gas output. The country could now need up to 60 LNG cargoes to cover its 2025 needs, a second trading source said, adding over the long term that could rise as high as 150 cargoes. It is in talks with Qatar, Algeria, Saudi Aramco, and major global trading houses, the sources said. Egypt's Ministry of Petroleum, Qatar Energy, Saudi Aramco and the Algerian Ministry of Energy and Mining did not immediately respond to Reuters requests for comment. Egypt has bought 1.84 million tons (mt) of LNG this year, data from S&P Global Commodity Insights shows. That's almost 75% of its total for 2024. ISRAELI GAS An additional problem has been lower supply from Israel's offshore Leviathan field which has been blamed on scheduled maintenance. That has forced Egypt to halt or reduce gas supplies to several fertilizer factories for at least 15 days. "My factory has come to a complete stop since Saturday. Others are working on partial capacity," the head of a fertilizers factory told Reuters, on the condition of anonymity. A prolonged halt could hit exports of fertilisers, a key source of foreign currency. Egypt relies heavily on imported Israeli gas, which accounts for 40-60% of its total imported supply and about 15-20% of its consumption, JODI data shows. Yet it faces the prospect of paying more for it, as two other industry sources told Reuters that Israel wants to raise its exported gas prices by 25%. Prices for Israeli gas are linked to oil prices which have fallen, while prices of LNG are linked to other benchmarks such as the Japan Korea Marker (JKM) in Asia, gas prices at the Dutch TTF gas hub in Europe, or Henry Hub in the U.S. "Israel wants higher prices, because now they are so low at about $6/mmBtu (million British thermal units) at today's Brent prices, while LNG price is closer to $14/mmBtu. Israel was satisfied when the prices was around $7.50 mmBtu," one of the sources said. A spokesperson for the Israeli energy ministry told Reuters that prices in the gas sector are determined through business negotiations between companies. "The Government of Israel is not a party to this negotiation process. This is a business matter," she said. Egypt's Ministry of Petroleum did not immediately respond to a Reuters request for comment.
Yahoo
22-05-2025
- Business
- Yahoo
Exclusive-Egypt in talks to buy 40-60 LNG cargoes amid energy crunch, sources say
By Mohamed Ezz and Marwa Rashad CAIRO/LONDON (Reuters) - Egypt is in talks with energy firms and trading houses to buy 40-60 cargoes of liquefied natural gas (LNG) amid a worsening energy crunch ahead of peak summer demand, three sources aware of the matter told Reuters. The country faces spending up to $3 billion at current prices to secure the LNG, squeezing government coffers already under strain to keep the lights on amid falling gas production and a cost of living crisis. President Abdel Fattah al-Sisi on Wednesday directed the government to "preemptively take whatever needs necessary to ensure stable electricity flow," according to a statement. "The government is now in talks to import at least 40 LNG cargoes and around 1 million tons of fuel oil," an industry source familiar with the matter told Reuters. "Gas was the primary focus, given the more flexible payment options available compared to fuel oil, though the latter remains under consideration if LNG prices are unfavourable," the source added. In the past two years, Egypt endured rolling blackouts as natural gas supply fell short of demand. Egypt's own gas output in February hit its lowest level in nine years. The world's most populous Arab country returned to being a net importer of gas last year, buying dozens of cargoes and abandoning plans to become a supplier to Europe as its production tumbled. Egypt's hard currency crunch has delayed payments to international oil firms, curbing exploration and slowing oil and gas output. The country could now need up to 60 LNG cargoes to cover its 2025 needs, a second trading source said, adding over the long term that could rise as high as 150 cargoes. It is in talks with Qatar, Algeria, Saudi Aramco, and major global trading houses, the sources said. Egypt's Ministry of Petroleum, Qatar Energy, Saudi Aramco and the Algerian Ministry of Energy and Mining did not immediately respond to Reuters requests for comment. Egypt has bought 1.84 million tons (mt) of LNG this year, data from S&P Global Commodity Insights shows. That's almost 75% of its total for 2024. ISRAELI GAS An additional problem has been lower supply from Israel's offshore Leviathan field which has been blamed on scheduled maintenance. That has forced Egypt to halt or reduce gas supplies to several fertilizer factories for at least 15 days. "My factory has come to a complete stop since Saturday. Others are working on partial capacity," the head of a fertilizers factory told Reuters, on the condition of anonymity. A prolonged halt could hit exports of fertilisers, a key source of foreign currency. Egypt relies heavily on imported Israeli gas, which accounts for 40-60% of its total imported supply and about 15-20% of its consumption, JODI data shows. Yet it faces the prospect of paying more for it, as two other industry sources told Reuters that Israel wants to raise its exported gas prices by 25%. Prices for Israeli gas are linked to oil prices which have fallen, while prices of LNG are linked to other benchmarks such as the Japan Korea Marker (JKM) in Asia, gas prices at the Dutch TTF gas hub in Europe, or Henry Hub in the U.S. "Israel wants higher prices, because now they are so low at about $6/mmBtu (million British thermal units) at today's Brent prices, while LNG price is closer to $14/mmBtu. Israel was satisfied when the prices was around $7.50 mmBtu," one of the sources said. A spokesperson for the Israeli energy ministry told Reuters that prices in the gas sector are determined through business negotiations between companies. "The Government of Israel is not a party to this negotiation process. This is a business matter," she said. Egypt's Ministry of Petroleum did not immediately respond to a Reuters request for comment. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-05-2025
- Business
- Yahoo
EU seeks to cut remaining Russian gas ties, but legal options limited
By Kate Abnett and Marwa Rashad BRUSSELS/LONDON (Reuters) -The European Union will on Tuesday announce a roadmap to phase out the bloc's remaining gas ties with Moscow, but in the absence of sanctions it will be difficult for buyers to exit gas contracts using legal options such as force majeure. The roadmap will be presented on Tuesday in Strasbourg by EU Energy Commissioner Dan Jorgensen, a Commission spokesperson confirmed on Monday. It comes as the U.S. is pushing Russia for a peace deal with Ukraine. If reached, the deal may reopen the door for Russian energy and ease sanctions. Around 19% of Europe's gas still comes from Russia, via the TurkStream pipeline and liquefied natural gas (LNG) shipments. The European Union has a non-binding goal to end Russian fossil fuel imports by 2027 - a goal which the upcoming EU roadmap is designed to deliver. The Commission is exploring legal options to allow European companies to invoke force majeure and break their Russian gas contracts without facing penalties, as well as measures to forbid companies from entering into new contracts for Russian gas, a senior EU official has said. Lawyers and analysts said it was doubtful that force majeure would work, given the years that have passed since the EU vowed to end Russian gas imports in 2022, after Russia's invasion of Ukraine. Agnieszka Ason, an independent energy lawyer specialising in LNG contracts, said that for force majeure to be declared, an unforeseeable event - beyond the companies' control - must occur which prevents a company from fulfilling its contract. But remaining Russian supplies have been proved to be working well over three years of war. "Any deliberate action that the EU would undertake already weakens the force majeure case. It's the opposite of what force majeure as a concept is about," said Ason, who is also a senior research fellow at the Oxford Institute for Energy Studies. Legal experts said that sanctioning Russian gas imports is the most effective measure to phase out Russian gas. That would require unanimous approval from all 27 EU countries, but Slovakia and Hungary have sought to maintain close political and business ties with Russia, and the latter has vowed to block energy sanctions. Since the onset of the war in Ukraine, Gazprom and European companies have launched legal cases and counterclaims over breached gas contracts and missed payments. Based on court documents, Reuters calculations estimate these disputes to be worth around 18.5 billion euros ($21 billion). Contracts with Russian gas firm Gazprom include "take-or-pay" terms that require buyers that refuse gas deliveries to still pay for up to 95% of the contracted volumes. David Haverbeke, partner at law firm Fieldfisher, said the EU should focus on helping companies argue that a change in circumstances since 2022, such as the risks of purchasing Russian gas versus other supplies, should give them grounds to renegotiate, and potentially quit, their Russian contracts. "I would try to rely on EU regulation passed since 2023 and invoke hardship based on the changes in the regulatory framework," he said. Another option could be forcing companies to make future Russian LNG purchases via an EU joint buying scheme - and setting a maximum quota on the volumes that could be bought, Haverbeke said. Sign in to access your portfolio
Yahoo
05-05-2025
- Business
- Yahoo
EU seeks to cut remaining Russian gas ties, but legal options limited
By Kate Abnett and Marwa Rashad BRUSSELS/LONDON (Reuters) - The European Union will on Tuesday announce a roadmap to phase out the bloc's remaining gas ties with Moscow, but in the absence of sanctions it will be difficult for buyers to exit gas contracts using legal options such as force majeure. The roadmap comes as the U.S. is pushing Russia for a peace deal with Ukraine. If reached, the deal may reopen the door for Russian energy and ease sanctions. Around 19% of Europe's gas still comes from Russia, via the TurkStream pipeline and liquefied natural gas (LNG) shipments, and the European Union has a non-binding goal to end Russian fossil fuel imports by 2027. The Commission is exploring legal options to allow European companies to invoke force majeure and break their Russian gas contracts without facing penalties, as well as measures to forbid companies from entering into new contracts for Russian gas, a senior EU official said last month. Lawyers and analysts said it was doubtful that force majeure would work, given the years that have passed since the EU vowed to end Russian gas imports in 2022, after Russia's invasion of Ukraine. Agnieszka Ason, an independent energy lawyer specialising in LNG contracts, said that for force majeure to be declared, a supplier has to breach the contract, for example, through non-delivery. But remaining Russian supplies have been proved to be working well over three years of war. "Any deliberate action that the EU would undertake already weakens the force majeure case. It's the opposite of what force majeure as a concept is about," said Ason, who is also a senior research fellow at the Oxford Institute for Energy Studies. Legal experts said that sanctioning Russian gas imports is the most effective measure to phase out Russian gas. That would require unanimous approval from all 27 EU countries, but Slovakia and Hungary have sought to maintain close political and business ties with Russia, and the latter has vowed to block energy sanctions. Since the onset of the war in Ukraine, Gazprom and European companies have launched legal cases and counterclaims over breached gas contracts and missed payments. Based on court documents, Reuters calculations estimate these disputes to be worth around 18.5 billion euros ($21 billion). Contracts with Russian gas firm Gazprom include "take-or-pay" terms that require buyers that refuse gas deliveries to still pay for up to 95% of the contracted volumes. David Haverbeke, partner at law firm Fieldfisher, said the EU should focus on helping companies argue that a change in circumstances since 2022, such as the risks of purchasing Russian gas versus other supplies, should give them grounds to renegotiate, and potentially quit, their Russian contracts. "I would try to rely on EU regulation passed since 2023 and invoke hardship based on the changes in the regulatory framework," he said. Another option could be forcing companies to make future Russian LNG purchases via an EU joint buying scheme - and setting a maximum quota on the volumes that could be bought, Haverbeke added.
Yahoo
01-05-2025
- Business
- Yahoo
Exclusive-QatarEnergy in talks with Japan on long-term LNG supply deal
By Marwa Rashad, Emily Chow, Yuka Obayashi and Maha El Dahan LONDON/SINGAPORE (Reuters) - One of the world's biggest liquefied natural gas suppliers, QatarEnergy, is in talks with Japanese firms for a long-term deal to supply LNG from its North Field expansion project, five trading and industry sources told Reuters. Under the deal, Qatar would supply a consortium of Japanese importers, and a volume of at least 3 million metric tons per annum of gas would be split between them, four of the sources said. If agreed, it would help to confirm Doha's decades-old dominance of the Japanese market, as competition intensifies from the United States and from neighbouring Gulf suppliers, the United Arab Emirates and Oman, that offer more flexible contract terms. It would also be the first deal since Reuters reported in October that Qatar was finding it hard to agree to LNG term deals with east Asian buyers in Japan and South Korea due to competition. The buyers in talks with QatarEnergy include JERA, Japan's largest power generator and trading house Mitsui & Co, said four of the sources, who declined to be identified as they were not authorised to speak to the media. QatarEnergy did not immediately respond to a Reuters request for comment, while JERA said it is in discussions with various suppliers for LNG procurement. It recognised Qatar as an important supplier, but said it would not disclose specific details of its discussions. At an earnings briefing on Monday, a JERA executive said the company needed to diversify its sources of supply. "Asia-Oceania currently accounts for more than half of our procurement sources. For supply stability, expanding options to regions like North America and the Middle East would be beneficial," Naohiro Maekawa, head of the financial strategy and planning division, said. When asked if the company is in talks with QatarEnergy over a long-term LNG contract, Mitsui said it is in discussions with various sellers to ensure stable LNG supply, but would not provide details of individual discussions. NORTH FIELD EXPANSION Qatar was the third largest LNG exporter globally after the U.S. and Australia last year, exporting 79.54 million metric tons of LNG in 2024, according to data from analytics firm Kpler. The Middle Eastern country is planning for an 85% expansion in LNG output from its North Field's current 77 million tons per annum to 142 mtpa by 2030, from a previously expected 126 mtpa. Japan is the world's second biggest LNG buyer after China, with its trade data showing imports of 65.89 million tons of the fuel last year. Qatar had been among Japan's top three LNG suppliers a decade ago, shipping over 15-16 mtpa to the East Asian country between 2012-2014. The surge followed Qatar's support in ramping up LNG exports after the 2011 earthquake and tsunami triggered the Fukushima nuclear disaster, leading to the gradual shutdown of all Japanese nuclear reactors. But those volumes have since shrunk, as Japan's nuclear reactors have slowly restarted. JERA also chose not to renew its long-term contract with Qatar for 5.5 mtpa, which expired at the end of 2021. Qatar exported just under 3 million tons to Japan last year, Kpler data showed. A senior JERA executive told Reuters in January that his company planned to increase its LNG purchases from the United States to diversify its supply and meet demand growth spurred by data centres and AI and also plans to talk to suppliers in the Middle East to help diversify its suppliers.
