Egypt turns to natural gas alternatives for powering electricity plants

Egypt is shifting towards increasing its reliance on fuel oil to power electricity plants – rather than natural gas – in light of rising global prices, an official source in the petroleum sector said.

The source noted that while power plants primarily run on natural gas, the rise in global prices—which have now reached approximately US$ 28 per million British thermal units (BTU)—is driving a move toward greater use of fuel oil.

Currently, fuel oil accounts for 10 percent of the fuel mix used to operate these power plants.

The source explained that the plants are capable of running on either natural gas or fuel oil.

Although fuel oil is less efficient, the significant cost difference between it and natural gas makes it a more favorable option under the current circumstances.

He explained that efficiency gains are typically lower during the summer; however, as winter approaches, the use of fuel oil becomes more effective.

There has also been a decline in the demand for natural gas, with consumption dropping by nearly 14 percent compared to the summer season.

Rising global petroleum prices

The former Vice Chairman of the Egyptian General Petroleum Corporation, Medhat Youssef, said that there has been a significant increase in the global prices of petroleum products as a result of the current crisis.

He added that the cost of one million BTUs of fuel oil is approximately $16.10, whereas the same amount of energy derived from natural gas—including the cost of the gas itself and its transportation—reaches about $30.

Youssef said that using fuel oil instead of natural gas results in a cost difference of approximately 50 percent.

He called for increasing the supply of fuel oil by shifting toward importing crude oil and expanding domestic production, rather than importing finished fuel oil at a higher cost.

The current price of a ton of fuel oil is approximately $ 600, while the price of crude oil stands at about $ 109 per barrel, he noted.

He added that importing crude oil and refining it domestically would facilitate the production of fuel oil, diesel, naphtha, and other high-value products, while also helping to reduce the costs of importing petroleum products—a significant benefit given their currently rising global prices.

Edited translation from Al-Masry Al-Youm

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