Egypt’s Thirst for Cheap Gas Threatens Export Prospects: Energy - Bloomberg

Egypt’s Thirst for Cheap Gas Threatens Export Prospects: Energy - Bloomberg:

"Egypt’s natural-gas shipments are set to drop by about half this year, undermining the military led-government’s attempts to stabilize the largest economy in North Africa.
Eni SpA (ENI) and BG Group Plc (BG/), international oil companies with investments in Egyptian export terminals, said a policy that encourages gas consumption at home, caps prices and has left the state owing $6 billion to producers is holding back investment in new fields. Egypt is set to fall behind Equatorial Guinea to fourth place among Africa’s gas exporters this year, according to data compiled by Bloomberg.
The dilemma for Egypt’s new leaders is that the nation’s thirst for cheap gas leaves little scope to pare back subsidies that cost 7.3 percent of gross domestic product. While the state is starting to repay the debt owed to gas producers, the country will find it hard to win new investment into its country’s largest export industry until price limits are raised, Eni Chief Executive Officer Paolo Scaroni said."

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