Apicorp sees more woes for Egyptian and Algerian LNG

The multilateral lender flags risks of ongoing shut-ins and difficult contract negotiations

Egypt’s LNG liquefaction plants could remain “heavily underutilised” until 2022, exporting less than 4mn t/yr, according to the 2020-24 gas and petrochemical outlook published by Saudi Arabia-headquartered multilateral development financier Apicorp. Algeria is also “entering a renegotiation of some of its contracts in a buyer’s market”, it warns. Egypt’s particular problem, the report notes, is that the feedstock for its plants comes from expensive deep offshore fields. Apicorp estimates that its upstream cost of gas is $4.50/mn Btu (see Fig. 1), which “alone may exceed current hub prices”. Adding on $1.75/mn Btu in liquefaction costs puts average Egyptian LNG costs on a free-on-board (Fob)