Citadel Capital in joint venture to import LNG to Egypt

Updated 23 November 2012

Citadel Capital in joint venture to import LNG to Egypt

DUBAI: Citadel Capital SAE has agreed with Qatari investors to import liquefied natural gas (LNG) into Egypt from mid-2013, the Egyptian private equity firm said.
Egypt has two LNG terminals and a pipeline to export some of its large gas reserves, but it has been diverting some of the fuel intended for export to meet rapidly growing domestic demand after summer fuel shortages and power cuts.
“Egypt is in strong need of additional natural gas to feed the power generation sector and supply Egypt’s industrial base,” Citadel Capital Chairman Ahmed Heikal said in a statement.
Egyptian Prime Minister Hisham Kandil said recently that Cairo was in talks to import LNG from Qatar, the world’s largest producer of super-cooled gas, and Algeria.
Citadel Capital said the joint venture, which will be 51 percent owned by Qatari investors and investment bank QInvest, would build and own facilities needed for a floating LNG storage and regasification unit (FSRU) to deliver natural gas to high-volume end-users in the north African country from the middle of next year.
According to the terms of the agreement, the joint venture will import LNG, warm it back into gaseous form on board the special ship and then pump it into the Egyptian national gas grid to help to meet demand from large users such as power stations.
FSRU’s are attractive to many new LNG importers because they are much cheaper and quicker to set up than permanent regasification facilities that can cost billions of dollars.
Because the special ships can be relocated during periods of lower demand, FSRU’s are increasingly popular solutions to soaring energy demand in countries where gas demand is highly seasonal.
Some countries in the Middle East are looking to develop them as a mid-term solution to soaring gas demand while they try to develop their own gas reserves.
The planned location of the FSRU facility, the source of the LNG and the project’s expected investment cost were not announced. But assuming that most of the LNG will come from Qatar, it could be located on the Red Sea coast of Egypt so that tankers do not have to navigate the Suez Canal.
Citadel did not disclose how much it is paying for its 49 percent stake in the venture, its second joint venture with Qatari investors this year after closing a $ 3.7 billion financing package for the Egyptian Refining Company project, in which Qatar Petroleum International is a key shareholder.


Saudi defense contractor to invest up to $16 million to further localize services

Updated 18 November 2019

Saudi defense contractor to invest up to $16 million to further localize services

DUBAI: Saudi-based defense contractor Middle East Propulsion Company (MEPC) plans to invest between $13 million and $16 million over the next two years to build test cells for aircraft engines and establish new production lines.
These expansion activities should complement the company’s objective to localize high-tech repairs and combine them in one roof for the Saudi defense ministry, which is a major customer, CEO Abdullah Al-Omari told Arab News.
Instead of sending aircraft engines and engines modules overseas for further servicing, thus take up more time before military assets return to actual service, localization not only cuts the turn-around period but also reduces Saudi government spending for the repairs.
“We have accomplished more than 1,600 engine and engine modules [since 2001, they] have been maintained totally in Saudi Arabia,” Al-Omari said at the sidelines of the Dubai Airshow. “The engines consume 45 percent of what you spend on aircraft.”
The company works on 150 to 160 engines and engine modules every year.
MEPC is the first specialized MRO (maintenance, repair and overhaul) company operating in the Middle East, according to its website. It has invested over $26 million during the previous two years for the localization of its MRO services.
“We used to send these parts to outside, it takes 6 months to 24 months sometimes … in case of the Apache engines, minimum turn around is 24 months,” Al-Omari said, but their localization efforts have greatly improved their capability by cutting the turn-around period to only 150 days.
The speed at which MEPC is able to repair engines and modules, boosts the readiness of Saudi military, Al-Omari added.
The company is in talks with major defense contractors, including Honeywell for the Abrams talks and GE T700 engines, for possible tie-ups to further improve their capability, he said.
“Currently there is a potential with the Kuwait army to provide them with similar services [being delivered to the Saudi defense ministry],” Al-Omari said, and expects that cooperation would start “within the next two years or so.”