By:Fxleaders

Egypt is in discussions with energy companies and trading houses to acquire 40 to 60 LNG cargoes in preparation for peak summer demand.

The nation may have to spend up to $3 billion to secure the LNG, further taxing government coffers already stretched to keep the lights on in the face of declining gas production and a crisis in the cost of living. “Preemptively take whatever is necessary to ensure stable electricity flow,” per a statement issued by President Abdel Fattah al-Sisi on Wednesday.

Reuters was informed by an industry source familiar with the situation that “the government is now in talks to import at least 40 LNG cargoes and around 1 million tons of fuel oil.”. Given the more flexible payment options available compared to fuel oil, “gas was the primary focus, though the latter remains under consideration if LNG prices are unfavorable,” the source continued. Due to a shortage of natural gas, Egypt has experienced rolling blackouts for the last two years.

Egypt produced the least amount of gas in nine years in February. The most populous Arab country reverted to being a net importer of gas, purchasing dozens of cargoes and forgoing plans to supply Europe as its output plummeted.

Payments to foreign oil companies have been delayed because of Egypt’s hard currency crisis, which has slowed oil/gas exploration and production