With its LNG volumes sold on spot markets rather than through long-term sales contract, Egypt is a useful barometer of the state of global LNG markets. And with an internal memo seen by MEES indicating that Egypt may opt to shut-in its LNG export facilities next month, it appears that demand and prices might be softening considerably as we exit the peak-winter buying period.
State-firm EGPC purchases gas from IOCs at between $4-5/mn BTU and as such it cannot turn a profit when spot prices fall below the $5/mn BTU mark. This calculation led Egypt to shut-in its 7.2mn t/y Idku terminal in mid-March last year and push back the restart of the 5mn t/y Damietta plant as spot prices fell amid an oversupplied market (MEES, 10 April 2020). (CONTINUED - 854 WORDS)