By Mohamed Adel

Egypt has signed a deal with Norway’s Hoegh to supply a floating terminal needed to import liquefied natural gas (LNG), the petroleum ministry said on Monday, marking a step toward securing badly needed gas for power generation and industry.

The deal will generate pretax earnings of some $40m per year for Hoegh, the firm said on Monday.

A source at the Ministry of Petroleum said it would cost $1.25 to convert one million British thermal units from liquefied gas to gas. Transporting the gas from the port to the national gas network, would cost $1.

The contract for the Floating Storage and Regasification Unit will last for five years, the ministry said in a statement.  It added that the terminal would be moored off of the Red Sea port of Ain Sokhna from 1 September, and that the platform has a storage capacity of 170,000 cubic metres. The final testing was conducted in South Korea.

Egypt, which cannot import LNG without the terminal, began soliciting proposals for the project about 18 months ago.