A worker holds steel rods at a factory belonging to Ezz Steel, Egypt's largest steel producer, at an industrial complex in Sadat City, 94 km (58 miles) north of Cairo, April 17, 2013. REUTERS/Amr Abdallah Dalsh
CAIRO, Jun 13 (Reuters) - Egypt will divert natural gas supplies away from industry in August to meet increased demand from electric power plants, an official at the country's state gas board EGAS told Reuters on Monday.
Natural gas shortages have in the past forced EGAS to ration gas supplies to industry during months of peak consumption, crippling production and hampering Egypt's economic recovery.
Once an energy exporter, Egypt has turned into a net importer because of declining oil and gas production and increasing consumption. It is trying to speed up production at recent discoveries to fill its energy gap as soon as possible.
"The needs of the electricity sector in Egypt are expected to rise to 3.9 bln cubic ft per day in August from 3.2 bln cubic ft currently," the EGAS official, speaking on condition of anonymity, said.
Egypt currently produces about 3.9 bln cubic ft of gas per day and imports about another 1-1.1 bln cubic ft per day.
"We have informed the industrial sector that its supplies of gas will be reduced and have requested that they use this period for maintenance," the EGAS official added.
An official at one of Egypt's steel companies said that they have yet to receive a formal notification of the supply cut but that there was an "unofficial agreement" that this would occur in August.
Egypt said in March that it would reduce the price it offers natural gas to steel and iron factories to $4.5 per one million thermal units from $7, but this has yet to be implemented.
(Reporting by Abdel Rahman Adel and Ehab Farouk; Writing by Eric Knecht; editing by Adrian Croft)