Egypt currency crisis hits bitumen import capability

A worsening currency crisis in Egypt is significantly affecting the country's ability to import bitumen, with some of its usual suppliers expecting no requirements from state-owned EGPC before May or June at the earliest.

Such a prolonged delay, coupled with expectations of much-increased flows from two new Turkish export terminals around Ceyhan and the recent resumption of cargo exports from Eni's 88,400 b/d Livorno refinery in Italy, would considerably add to east Mediterranean bitumen supply in the coming months.

EGPC, which typically issues monthly import tenders for bitumen cargo deliveries to its Alexandria terminal, and occasional tenders into Suez, earlier this month cancelled its January tender into Alexandria that it had previously awarded to trading firms Vitol and Gunvor.

The Egyptian firm also opted not to issue a February import tender, and while its official stance is that its refinery production of bitumen is sufficient to meet domestic requirements, suppliers to Egypt say a lack of available financing is the central reason for the halt.

A source familiar with the EGPC tender process said today the company's bitumen imports had been "temporarily suspended".

Egypt secured a $3bn funding agreement with the IMF last October as its economy wrestles with the economic fallout from the Russia-Ukraine conflict. The Egyptian pound has since hit record lows against the US dollar, today standing at just under EGP30, nearly halving in value — thereby almost doubling dollar import costs — from EGP15.76 in mid-February last year.

After an ambitious infrastructure investment drive in recent years, Egypt's bitumen cargo imports rose to 359,000t in 2022, according to Vortexa, from 349,000t in 2021 and 314,000t in 2020. That came despite EGPC's start-up in March last year of a bitumen production unit at one of its Suez refineries.

Import financing issues came to the fore late in 2022 when delivery of a 30,000t Vitol cargo — awarded to the trading firm under EGPC's November tender into Alexandria — was heavily delayed. The 36,900 dwt Star River, which arrived at Alexandria with the Greek cargo around 20 November, finally completed discharge in early January.

By Keyvan Hedvat and Tom Woodlock