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Egypt is seeking to buy large volumes of gas this summer from global markets with deferred payments of up to six months, terms that market sources said would narrow the list of bidders and increase premiums at a time of high competing demand from Asia.
In a tender that closes on June 26, Egypt's Natural Gas Holding Company (EGAS) is seeking delivery of 17 LNG cargoes, seven in July, six in August and four in September on an ex-ship (DES) basis, trading sources told Reuters.
The most populous Arab country had been setting itself up as a reliable LNG exporter to Europe in recent years, but dwindling natural gas supplies have forced Cairo to return to being a net importer of gas.
To secure the requested volumes, Egypt could eventually pay more than the average $1 - $2 per million British thermal unit (mmBtu) premium to the Dutch TTF hub gas price, the sources said.
"Any longer term payment terms would warrant an additional premium," one source said.
Cairo already paid a premium to the TTF price of between $1.3 and $1.7 per mmBtu for cargoes it bought earlier this year, S&P data showed.
Egypt's petroleum ministry did not immediately respond to a request for comment during the Eid holiday.
There is robust Asian demand for Atlantic volumes, which are also expected to be the main source of Egypt's supply, as the Bab al-Mandab strait remains effectively closed due to Middle East tensions.
"It is likely only Atlantic LNG supply would be competitive in this tender. But demand from Asia, particularly Japan, has been stronger in recent weeks than had been previously anticipated by many," said Samuel Good, head of LNG pricing at commodity pricing agency Argus.
"Any non-standard elements in the tender terms would further buoy this premium," he added.
The Hoegh Galleon floating storage and regasification unit (FSRU), which arrived at Ain Sokhna port last week, is expected to handle 12 of the expected cargoes, while 5 others will be received at the Aqaba port in Jordan, the sources said.
(Reporting by Marwa Rashad and Ron Bousso; Editing by Kirsten Donovan)