Qatar-Egypt venture to bid for LNG import contracts

January 09, 2013 - 12:52:54 am

BY MOHAMMAD SHOEB

DOHA: Battling severe economic hardships, Egypt’s Islamist government wants local private players to play a major role in narrowing down the yawning gap between energy supplies and demand, says a visiting official from a key Egypt-based investment company.

Taking advantage of the government’s encouragement of the private sector, Egypt’s Citadel Capital has in fact formed a joint venture with Qatar’s QInvest that would soon bid for contracts to import liquefied natural gas (LNG) into Egypt.

And, the joint venture, which is yet to be named, is to begin bidding as soon as the coming Sunday (January 13) to bring additional gas on the Egyptian market, especially, for the industries, said Mohamed Shoeib (pictured), Managing Director of Energy Division at Citadel Capital. Shoeib is here to attend the ongoing 4th General Conference of Arab Union of Electricity and Exhibition.

Egypt’s energy portfolio is different from Europe and other countries. Over 90 percent of its electricity is generated in thermal power plants which are mainly fed on gas and fuel oil. 

According to Shoeib, the country witnesses a high level of demand and supply deficit during summer season. Aiming to overcome the demand and supply gap of energy, the post-Mubarak government is encouraging and inviting private companies in a big way to play a significant role for the regasification of the domestic industry. 

The leading private equity firm Citadel Capital (49 percent) formed a joint venture with QInvest (51 percent) as well as other Qatari investors to import liquefied natural gas (LNG) into Egypt from mid-2013.

Citadel Capital is a leading investment company in Africa and the Middle East with about $9.5bn in investments. The firm participated in the conference to discuss investment opportunities in the regional energy sector. It will construct and own the facilities required to position a floating LNG storage and regasification unit to deliver natural gas to high-volume end-users in the local market.

Asked to comment about the estimated investment cost of the joint venture, Shoeib declined to give further details about the project. Keeping in mind the depleting nature of fossil fuel energy, he highlighted the need for an integrated approach to the region’s energy problems. He also discussed the ‘triple combo’ fundraising strategy targeting Development Finance Institutions, Sovereign Wealth Funds and Export Credit Agencies.

Shoeib was here to moderate a panel on the role and benefits of private capital in the power and alternative energy sectors in the region, with some of the topics discussed including the general financing requirements for such projects and the institutions involved in financing them. 

“Despite the GCC accounting for around 54 percent of the world’s conventional oil reserves and around 40 percent of global natural gas reserves, the inevitability of our one day reaching a ‘peak oil’ stage is undeniable, making the search for renewable and alternative energy solutions a particularly pressing issue for our generation as we seek an optimal balance between conventional and renewable sources of energy,” added Shoeib.

According to him, an integrated approach from a multiplicity of sources along the value chain — upstream, midstream and downstream — stretching from petroleum to electricity to renewables is required in order to come up with a solution that truly tackles the energy problems that the region faces today. 

The Peninsula

 
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