Shut down of Chevron natural gas field offshore Israel halts Egyptian imports
(Bloomberg) – Egypt’s natural gas imports have ground to a halt, the cabinet said Sunday, in a development that reflects the impact of the Gaza conflict on the North African nation and could dash hopes of a resumption of exports to Europe.
The cabinet, explaining the reasons for the expansion of power cuts that have roiled the country for months, said that natural gas imports have fallen from 800mcf/d to zero at a time when warmer-than-usual temperatures led to an increase in electricity demand.
The halt in the gas imports appears linked a decision earlier this month by Israeli authorities to shut down the offshore Tamar gas field amid concerns it could be impacted by the fighting between its military and Hamas in the Gaza Strip.
Chevron Corp., which runs the gas field that Israel ordered shut as well as another major field that has stepped up production, could not immediately comment. The company had said Friday it continued to honor some of its contracts with Egypt.
The latest announcement that imports have stopped will be watched by European gas traders. Egypt imports gas from Israel and then exports some of it on to Europe as LNG. Italian oil giant Eni said last week it expected Egypt to restart gas exports as domestic demand drops.
In Egypt, power cuts have been in place since the middle of the year, with officials linking them to unusually high temperatures along with cost-saving measures as the country grapples with its worst foreign currency crisis in decades. The government said other factors impacting the power cuts include a decline in electricity from renewable energy sources.
The cuts, which officials had managed to restrict to around an hour a day, have become another source of frustration for Egyptians already suffering from record inflation linked to three devaluations of the currency since early 2022.
