Qatar-Egypt LNG Supply Talks On Hold As Summer Peak Passes

Egypt and Qatar are not currently negotiating further natural gas deliveries as supplies of fuels from other Gulf states and the end of peak summer demand eases pressure on Cairo to reach a deal, industry sources said.

Doha agreed in May to donate five cargoes of liquefied natural gas (LNG) and initial talks were held for Egypt to buy at least 13 more, but that was before the Egyptian army removed Qatar-backed Islamist President Mohamed Mursi from power in July.

“We haven’t resumed negotiations yet,” a senior Egyptian energy official said, noting Cairo was now past its peak summer power demand period.

Qatar’s enthusiasm for supplying cheap fuel has also been dampened after Egyptian security forces killed hundreds of Islamists over the last few months.

A Qatari industry source said the Egyptian army must ease pressure on Mursi’s Muslim Brotherhood supporters before the two countries can resume talks on more fuel.

Egypt has curbed gas exports in recent years as its domestic energy use has surged, peaking in mid summer as soaring temperatures boost demand for air conditioning.

To help this summer, Qatari officials convinced foreign partners in its LNG export projects to accept $13 per million British thermal units (mmBtu) for cargoes that Doha then donated.

Egypt was able to allocate the Qatari LNG cargoes it received to foreign partners, freeing up more of its own gas for the domestic market.

The cash-strapped government expects declining temperatures over the next few months to drastically reduce its gas needs.