Kuwait said on Wednesday it would ship around two million barrels of crude oil in early October to Egypt, giving it priority as a buyer ahead of sales from storage into the Mediterranean market.
The deal for two million barrels a month of Kuwaiti crude was signed this week with the Arab Petroleum Pipeline Co., known as SUMED.
SUMED, which owns and operates Egypt’s Mediterranean port of Sidi Kerir, is half owned by state run oil company Egyptian General Petroleum Corp (EGPC) while a group of four other Gulf Arab countries – Saudi Arabia, Kuwait, United Arab Emirates and Qatar – own the other half.
“The storage contract with SUMED aims at streamlining crude oil exports to Europe across the Mediterranean”, Nasser al-Mudhaf, managing director for international marketing at state owned Kuwait Petroleum Corp (KPC) told state news agency KUNA.
The first shipment of two million barrels will go to the Egyptian Red Sea port of Ain Sukhna, then will be pumped through pipelines to Sidi Kerir terminal.
“Egypt will be given priority according to its need”, KUNA quoted Mudhaf saying.
The SUMED pipeline allows oil firms to by-pass the shipping chokepoint of the Suez canal, which is too small to allow the passage of fully laden very large crude carriers (VLCCs) with cargoes of two million barrels.
The UAE, Saudi Arabia and Kuwait have together provided Egypt with billions of dollars in grants, loans and petroleum products since former President Mohamed Mursi of the Muslim Brotherhood was overthrown by the army last year.
Last week, Egypt said it would buy 65 per cent of its oil product imports for the next year from the UAE.