The Egyptian company EGAS and the Norwegian company Hoegh signed a liquefied natural gas (LNG) agreement on Monday, according to the Ministry of Petroleum.
The agreement is related to the introduction of a new technology in Egypt that involves the transformation of LNG from its liquid state to its natural gaseous state, which will be transferred into the national network as natural gas.
The signing of the contract comes after the company Hoegh won an international tender raised by EGAS. Hoegh was in competition with Malaysian, American, and Dutch companies. The signing was made by the president of EGAS Khaled Abdel Badei and the president of Hoegh Sveinung Stoehle.
A senior government official said that the best offers were made by Hoegh at a rate of $0.31 per million BTUs, while a competing offer by Qalaa Holdings only reached $0.45.
Hoegh is due to start operating a floating terminal in Ain Sokhna port by March 2015. For the next five years it will provide 500m cubic feet of natural gas per day to fulfil part of the extra requirements needed by power plants.
Abdel Badie said the seven offers in the global tender to import shipments of LNG are being evaluated. The final evaluation will be made and tender awarded this month.
He pointed out that an initial agreement had been made with SONATRACH and Gazprom to supply 14 shipments of LNG divided evenly between the two companies. Final preparations are being made to receive the supplies.
The floating terminal was recently built in the shipbuilding basin of Korean company Hyundai and is characterised by its modern and advanced technology, said Stoehle. He also added that EGAS and Hoegh will try their best to accelerate the operation of the vessel before March.