An international oil tanker passes through the Suez canal in Ismailia, Egypt December 14, 2004. (Photo by Scott Nelson/Getty Images)
Egyptian energy production and distribution company TAQA Arabia is working to help tackle the country’s acute energy shortages. Egypt is struggling with electricity generation and delivery issues – among other energy-related problems – that require flexible solutions.
Egypt’s growing population and power generation needs have bumped up against domestic energy production capacity, with demand exceeding supply to the point where natural gas originally envisioned for export as LNG has been diverted to the local market.
In addition to power generation needs, greater volumes of liquid transportation fuels are also in demand and TAQA Arabia is addressing these challenges by building power plants, gas distribution infrastructure and gasoline distribution assets, TAQA’s Chairman Khaled Abu Bakr recently told Breaking Energy.
“There is a deep need for power generation,” said Abu Bakr, who added that TAQA is evaluating the construction of power plants ranging from small-scale 14-megawatt facilities up to large-scale generation units.
The company is primarily looking at natural gas as a feedstock, but given the past year’s oil price decline, they are also considering fuel oil. TAQA studied coal generation but abandoned that option for the time being because obtaining US export bank financing for those projects is no longer an option, Abu Bakr explained.
The company is also getting into renewable energy because all options are needed to mitigate the country’s disruptive power shortages.
Abu Bakr said there is tremendous opportunity for private-sector investors in Egypt right now, but acknowledged that challenges also exist. For example, some banking and economic reforms enacted by the government are creating currency complications. “Securing foreign currency is challenge,” he said.
There is ample LNG available on international markets – with more coming on stream in the short term from the US and Australia – so TAQA has supply and a market in place. They are now working on power plant construction. The company expects to have its first plant on line in about 36 months and could have mobile units in place within 6 to 12 months said Abu Bakr.
As the global LNG business becomes more flexible and dynamic, with floating production and regasification options, TAQA will look to capitalize on those opportunities for use in addressing Egypt’s energy crisis.
TAQA’s major shareholders are private equity funds and family funds from Saudi Arabia and the UAE.
