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03-Apr-2016

EGAS cuts natural gas supplies from fertiliser plants for two weeks; resumes on 7 April

According to an article in Al Borsa, The Holding Company for Natural Gases (EGAS) has notified Egyptian fertiliser producers of a cut in natural gas supplies for a period of two weeks. According to the article, gas supply will return to the plants starting 7 April. EGAS stated that the reason for the cut was due mainly to delays in natural gas imports. Overall, the cut in natural gas supplies comes in line with our estimates that 2016 will continue to see some supply disruptions for fertiliser players in Egypt. Under our coverage, we assume operating rates will come at 75% for EK Holding's [EKHO.CA] Alexfert, as well as OCI NV's Egyptian assets. (Al Borsa, Ahmed Hazem Maher)   Egyptian Kuwaiti: USD0.47 as of 31 March 2016, Rating: Buy, FV: USD0.80 per share, MCap: USD481 million, EKHO EY / EKHO.CA OCI NV: EUR17.25 as of 31 March 2016, Rating: Buy, FV: EUR23.00 per share, MCap: USD4,131 million, OCI NA / OCI.AS

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