A temporary reduction in LNG import capacity and continuously high temperatures are leaving Egypt's urea production vulnerable to potential further fluctuations in output.
The country currently has access to only one LNG import terminal at Ain Sukhna.
Egypt had also been receiving LNG indirectly from Jordan's 3.8mn t/yr Aqaba facility. But the floating storage and regasification unit (FSRU) at Aqaba — the 160,000m³ Energos Eskimo — departed at the start of June, ahead of installation in Egypt, where the country's state-owned Egas will be able to receive shipments directly.
A gas supply crunch in the country hit urea production in mid-May, largely driven by maintenance at Israel's Leviathan field. Most of Egypt's plants have resumed production, with some electing to carry out maintenance for around two weeks following the shutdowns.
Summer in the city
President Mostafa Madbouly has publicly vowed that there will be no power cuts this summer, meaning that if there is a gas shortage, gas is likely to be directed to power plants as a priority over urea facilities.
And power demand for cooling could rise in the short term, with daily temperature highs in Cairo forecast to reach above 40°C later this week. The country's increased demand for cooling and slowing output have tightened the gas supply-demand balance in the summer in recent years.
Installed LNG import capacity is set to rise later this summer with the installation of a further two FSRUs, in addition to the one at Ain Sukhna and the Energos Eskimo on its way.
Operating rates at the country's urea plants are estimated at 70-80pc of capacity, with the collective loss of urea production in Egypt amounting to more than 150,000t since 17 May, Argus estimates. Egypt is one of the largest global urea producers with capacity of 7.2mn-7.3mn t/yr.
