Middle Eastern Conflict Could Weigh on Egypt’s LNG Exports

Egypt’s plans to resume LNG exports this month are uncertain, after the halt to Chevron’s Tamar field in Israel led to a 20% drop in gas flows to the country, Egyptian officials said.

• Chevron has been instructed by Israel’s Ministry of Energy on Monday to shut down the production of the 10bcm/yr (27mcm/d) Tamar gas field for safety reasons amid the ongoing conflict.
• The Egyptian Energy Minister earlier this month said the country is planning to resume LNG exports this month after increased domestic demand led to a halt in shipments this summer.
• One cargo was scheduled to be shipped so far this month, however, the LNG tanker left Egypt unloaded shortly after arriving on 6 October according to BNEF.
• The halt to the Tamar gas production will likely lead to a decline in gas pipeline exports to Egypt, who is an LNG exporter and Jordan, that is a potential LNG importer, which could weigh on Egypt’s plans to restart LNG exports this month, while potentially trigger higher LNG imports into Joran according to a Goldman Sachs note.
• The shutdown of the Tamar field could lead to a potential tightening of around 1.5% of global LNG supply, JP Morgen said in a note.
• Should Leviathan keep operating at usual rates and output is ramped up at the Karish field, Israeli gas should continue to flow to Egypt, according to Leo Kabouche, analyst at Energy Aspects.