*

Purchases cost over $8 billion, straining government

finances

*

Agreements inked with companies including Aramco, Shell,

Vitol

*

Egypt's domestic gas output has plummeted

(Adds analyst comment, context in paragraphs 11-18)

By Marwa Rashad

LONDON, June 12 (Reuters) -

Egypt has reached agreements with several energy firms and

trading houses to buy 150 to 160 cargoes of liquefied natural

gas, as it ramps up purchases to meet power demands despite

strained government finances, industry sources said.

The world's most populous Arab country has endured rolling

blackouts over the past two years as natural gas supply fell

short of demand. It returned to being a net importer of gas last

year, buying dozens of cargoes and abandoning plans to become a

supplier to Europe as domestic production tumbled.

But the cost of keeping the lights on is pressuring the

resources of a government already facing a cost of living

crisis, currency woes and slowing economic growth, which have

forced it to seek help from the International Monetary Fund.

The LNG deals represent Egypt's largest ever import

purchases and will cost it over $8 billion at current prices.

Egypt's Ministry of Petroleum and the Egyptian Natural Gas

Holding Company did not immediately respond to Reuters' request

for comment.

Agreements have been reached with global energy companies

and trading houses, including Saudi Aramco, Shell,

Vitol, Trafigura, BGN, SOCAR, and PetroChina, the

industry sources familiar with the matter told Reuters.

Between 50 and 60 cargoes will be used to cover this year's

demand. This is on top of 75 cargoes Egypt purchased earlier

this year. The rest will be delivered through the end of 2026.

This would make a total of 235 cargoes for this year and

next.

The cargoes were priced at a premium of $0.70-$0.75 above

the gas price at the Dutch TTF hub, with a nine-month deferred

payment.

Cairo has the flexibility to defer cargoes and the option of

getting additional LNG cargoes from some companies if needed.

Based on a standard-sized cargo of 72,000 metric tons,

"this is just shy of 8 million tons per annum, if deliveries are

spread equally over the two years," said Martin Senior, head of

LNG pricing at Argus.

The figure eclipses annual LNG production of both

Trinidad and Tobago and the UAE, and is higher than the imports

of Belgium, Britain or Kuwait, he added.

Egypt's large import volumes are not expected to cause

significant market tightness next year, however, as more

liquefaction capacity comes online, he said.

Egypt has already bought 2.25 million tons of LNG this

year, data from S&P Global Commodity Insights shows, the

equivalent of almost 90% of its total purchases last year. And

the number could be even higher if imports via Jordan are added.

Aly Blakeway, manager of Atlantic LNG at S&P Global

Commodity Insights, said the latest purchases by Egypt come as

maintenance is being carried out in the U.S. and Norway and as

Europe is undertaking its summer injection cycle.

Asian demand is also expected to pick up in August, he

said.

"With Europe still needing to refill its storages ahead

of winter and expected buying interest from Korea and Taiwan in

the peak summer months, Egypt's bid for LNG may lead to further

competition this summer for seaborne LNG cargoes," he added.

Egypt is upgrading its infrastructure in Alexandria and Ain

Sokhna to handle increased LNG cargo volumes. It currently

operates three floating storage and regasification units, with a

fourth expected to be supplied by Turkey's state-owned energy

firm BOTAS.