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Report: Egypt needs natural gas overhaul

June 21, 2013 at 8:02 AM   |   Comments

HOUSTON, June 21 (UPI) -- Egypt has some tough economic decisions to make as it struggles to meet domestic energy demands because of natural gas production declines, an analysis finds.

Energy research company Wood Mackenzie, which has offices in Houston, reports natural gas production from Egypt should stay around 6 billion cubic feet per day and is not expected to increase much beyond that for the rest of the decade.

Tight demand for energy in Egypt has exacerbated frustration with post-revolution political developments. Wood Mackenzie said several large discoveries of natural gas were made offshore Egypt in the 1990s and early 2000s. Since 2005, however, the size of those discoveries has declined.

Giles Farrer, a senior gas analyst for the research company, said Egypt could find short-term relief if it can broker a deal for liquefied natural gas from Qatar.

"However, the financial terms of the deal are still being negotiated and will be key to determining whether it succeeds," he said in a report published Thursday.

Wood Mackenzie says the Egyptian government needs to find a way to get its economy in order without jeopardizing the industrial sector. Since the revolution, the report says, there has been a "sharp drop" in exploration activity to the detriment of the Egyptian people.

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