The government has approved energy importation for industrial projects as part of a plan to liberate the energy sector. Industrial experts, however, say the decision is due to a shortage of natural gas.
The decision, headed by Prime Minister Ahmed Nazif, was made in April during a meeting on extending natural gas lines to industrial areas.
Minister of Trade and Industry Rachid Mohamed Rachid said a decision to import gas has yet to be implemented.
The ministry also decided to examine the possibility of building new petroleum refineries. The ministry intends to encourage private investment by offering reduced land prices and fee exemptions.
The Ministry of Trade and Industry said the Petroleum Ministry should supply industrial areas with gas and receive reimbursement through a temporary increase in the price of gas supply.
Ibrahim Zahran, a petroleum expert, said consideration of gas importation proves a shortage exists. Local production, Zahran added, has dropped since the beginning of the year. This decrease in gas production could have a negative impact on the state's ability to satisfy local needs and meet contractual commitments.
Zahran criticized statements by officials who have said that natural gas reserves are rising. If that claim is true, Zahran argued, production should also increase.
Egypt can only import gas from Iraq, which is connected to the Arab Gas Pipeline, Zahran added. He said BP sells 1000 cubic feet of natural gas at US$8 to the Iraqi government, while Egypt exports gas at US$1.25.
Zahran finally called for reviewing all natural gas export contracts and halting its exports to satisfy local needs.
Translated from the Arabic Edition.
