Letters of credit (L/Cs) can now be issued to finance imports of Kuwaiti oil into Egypt.

It now looks likely that Egypt will import regular shipments of crude from Kuwait on L/C terms after the two countries agreed preferential terms.

Prior approvals

The National Bank of Egypt (NBE) will participate in the process, and has already approved L/Cs worth US$240 million for the Egyptian General Petroleum Corporation (EGPC) to import oil from Kuwait.

Official sources say NBE approved the L/Cs at the end of last year but the deal for EGPC to take delivery of two million barrels a month of Kuwaiti crude was only signed in recent weeks.

Preferential deal

A preferential deal has also been recently struck under which Egypt is designated a priority buyer of Kuwaiti crude and will receive its shipments before other buyers in the Mediterranean market.

The deal was made between EGPC and the Arab Petroleum Pipeline Co, which is half owned by state run EGPC while the other half is owned jointly by Saudi Arabia, Kuwait, the UAE and Qatar.

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