Fertilizers giant MOPCO suspends operations over gas supply shortage
The step is a temporary measure until the operating conditions of its gas network improve, the company said in a disclosure sent to the Egyptian Stock Exchange on Tuesday.
It attributed the shutdown to an unprecedented rise in energy consumption caused by the ongoing heatwave, which exceeded normal seasonal levels.
According to the disclosure, this surge and the interruptions in regional gas supplies significantly impacted the network's gas reserves.
“To gas network operating company and not to cause any damage to the company’s plants due to these operating conditions, the supply of natural gas has been halted until improvement in the operating conditions of the network, and accordingly, the company’s three plants shut down,” it added.
MOPCO, established in 1998 within the Damietta Public Free Zone, is the country’s largest nitrogen fertilizer plant, with a capital exceeding EGP 2.5 billion.
Other fertilizer companies have recently taken similar actions, citing increased demand straining the natural gas network, exacerbated by the heatwave that escalated gas usage for electricity generation.
Earlier in June, the Egyptian government reduced the natural gas supply to fertilizer companies as part of an emergency plan to redirect supply to power generation to ameliorate electricity outages.
The government has introduced a nationwide load-shedding scheme due to a surge in domestic electricity consumption driven by the unprecedented heatwave, which has strained the country's natural gas network.
On Tuesday, Prime Minister Madbouly explained that the shortage in natural gas supply was caused by a stoppage in one of the natural gas stations in "a neighbouring supply country" for 12 hours that affected supply levels in Egypt.
He also noted that the government will import mazut and natural gas shipments valued at around $1.18 billion to stop nationwide power cuts from the third week of July till the end of summer.
According to Reuters, the petroleum ministry said gas supplies will gradually resume flowing to fertilizer factories in Egypt starting Thursday.