The National: Making the Most of Egypt’s Gas Bonanza

Egypt looks set to have a bonanza in natural gas in the coming few years. It must not squander the new production on fuel subsidies for consumers and sweetheart deals for favoured industries as it did during the previous boom in gas supply a decade ago.

The government has yet to follow up Abdel Fattah El Sisi’s bold move in raising energy prices soon after he was elected president last summer, but rather seems to be using the recent fall in international oil prices as an excuse not to risk angering people with more price increases. That would be a mistake. The longer one waits, the bigger the problem gets.

In recent months, the government has been cutting deals to speed up development of huge potential gas reserves. It has settled a backlog of debts to international gas companies and agreed to pay higher prices for the gas they deliver to the local market.

The deals will unlock a vast flow of gas that should in a few years provide enough supplies so that Egypt will no longer have to import even-costlier liquefied natural gas (LNG) from abroad. MORE