(MENAFN - Gulf Times) Egypt received a cargo of liquefied natural gas from Australia after the world's third-biggest exporter sent two shipments to the region in the past two years, signalling increasing demand.
The Woodside Rogers tanker arrived at Egypt's Ain Sokhna terminal on Thursday after loading at Australia's Dampier port on May 12, according to ship-tracking data on Bloomberg. Middle East and Europe will absorb excess supply amid rising output from plants in Oceania, Andy Flower, a former BP executive and now an independent consultant, said on Thursday by phone.
"Middle East gas demand is often underestimated," Leslie Palti-Guzman, a New York-based director of global gas at The Rapidan Group, said by e-mail on Thursday. "It will be a big part of the growth story for gas demand, and especially LNG as new markets in the region become importers."
Vitol and RWE are starting to supply nations from Egypt to the UAE at the same time as use in Northeast Asia, the biggest consuming region, is sliding. The start of import plants in Egypt and Jordan this year means regional imports will grow at the fastest pace anywhere in the world for the rest of this year, according to Energy Aspects Ltd, a consultant in London.Egypt and Jordan "constitute an attractive niche market for LNG suppliers, and they will increasingly become a destination for spot cargoes as the market becomes larger and more flexible," Palti-Guzman said.
Vitol, the world's biggest independent oil trader, agreed to supply Egypt with nine cargoes this year and next. Egypt also has LNG deals in place with Trafigura Beheer, Noble Group Ltd, Sonatrach Petroleum Corp and Gazprom.
RWE, Germany's second-biggest utility, supplied a commissioning cargo to a new floating regasification and storage unit in Dubai in April.
The Middle East and North Africa now have five floating plants for imports, which "still blows my mind," Blake Blackwell, senior vice president at Excelerate Energy, said at a conference in London on Tuesday. The company is the world's biggest provider of floating installations for LNG imports.
Israel, Kuwait, and Dubai were the only importers in the region until this year.
Middle Eastern nations mainly import LNG under short-term contracts, rather than the multiyear deals that are typical for buyers in South Korea and Japan.
In 2014, Australia sent just one cargo, less than 0.1mn metric tonnes, to the Middle East with Dubai as the destination. The remaining 23.6mn tonnes of exports were shipped to Asia, according to the International Group of Liquefied Natural Gas Importers. Australia also supplied Kuwait with a similar volume in 2013.
LNG demand in the Middle East is expected to rise 80% this year from a year earlier, Energy Aspects said in a note last month. That compares with declining demand in Latin America, stagnating imports in Asia and a slower growth rate of 11% in Europe, the consultancy said.