Egyptian fertilizer plants shut down temporarily due to gas supply pressures

Gas supplies will gradually resume flowing as of Thursday to fertilizer factories in Egypt after several chemical and fertilizer companies shut down plants on a temporary basis.

The companies said in bourse disclosures that increased consumption-driven pressures on the natural gas network led to fluctuations in supply. Some cited high temperatures as a reason for the disruption, as more gas was used for power generation.

On Tuesday, a joint statement by the petroleum and electricity ministries announced an extension of rolling power cuts across the country for an extra hour to allow for preventative maintenance on its regional gas and power networks, and because of increased consumption caused by a heatwave.

Temperatures rose to between 38-40 degrees Celsius (100.4°F) across Egypt on Tuesday and Wednesday and are expected to rise further on Thursday and Friday.

Egypt Kuwait Holding, Misr Fertilizers Company MFPC.CA and Abu Qir Fertilizers and Chemical Industries said they were shutting down plants for 24 hours until network pressure stabilized. Egyptian Chemical Industries Corp, Sidi Kerir Petrochemicals Co. also announced closures, but did not give a timeline.

Supplies of the natural gas that helps Egypt generate electricity have been dwindling at a time when an expanding population and urban development have been pushing up electricity demand. When temperatures rise, air conditioning use drives up power consumption. Scheduled power outages began in Egypt last summer, coming as a shock to Egyptians accustomed to years of reliable power supplies under President Abdel Fattah al-Sisi.

The government said they would be temporary but the load shedding continued after temperatures dipped. After a pause earlier this year for the holy month of Ramadan, when many Muslims fast during daylight hours, two-hour daily cuts resumed.

The government has heavily subsidized power prices for years and has deferred cuts to the subsidies amid economic pressures on citizens and businesses.

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