Listed Egyptian private equity firm Citadel Capital has teamed up with Qatari investors to begin importing liquefied natural gas into Egypt from the middle of next year.
The country suffered a string of fuel shortages this year amid the state petroleum company failing to import enough from foreign suppliers, with banks refusing to finance deals in the wake of the Arab Spring.
Citadel’s joint venture will be 51 per cent owned by Qatari investors and investment bank QInvest, which is also currently attempting a tie-up with Egypt’s biggest investment bank EFG Hermes.
The venture will build and own facilities needed for a floating LNG storage and regasification system to deliver gas to high-volume end-users by mid-2013.
Egypt currently has a pair of LNG terminals and an export pipeline for its gas reserves, but has been forced to divert some of the fuel internally this year due to rapidly growing domestic demand.
Citadel Capital chairman Ahmed Heikal said, “We are delighted to partner with QInvest on this project, which will stand as an important pillar of Egypt’s energy security at a key moment in the nation’s development.
“We believe that Egypt is in strong need of additional natural gas to feed the power generation sector and supply Egypt’s industrial base with a reliable, clean source of energy.
“Citadel Capital has very strong technical skills in this sector and unrivalled knowledge of the current and planned large consumers of natural gas, thereby putting us in a unique position to market imported natural gas in Egypt.”
The deal marks Citadel Capital’s second large project in Egypt’s energy sector with Qatari investors following this year’s successful financial close of the US$3.7bn financing package for the Egyptian Refining Company project.
Last month it emerged Citadel was planning more than $4bn of investments in Egypt over the next three years.
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