Egyptian Cabinet denies having to cover $50 M damage to Damietta vessel

Egypt’s cabinet on Thursday denied that the country will shoulder an estimated $50 million to repair a US-owned liquefied natural gas regasification vessel damaged in a July drone strike at Damietta port, while a senior energy official confirmed to Al Manassa the American owner will not pay the bill either.

The Cabinet Media Center labeled reports of Cairo funding the repairs as “fabricated, misleading, and untrue,” yet failed to disclose who will finance the work or provide any official valuation. 

In an official release, the government urged citizens “not to be swayed by rumors and false news, and to verify accuracy and ensure information originates from official sources,” while denying that officials at the state-run gas firm had released statements.

However, an official at the state-owned Egyptian Natural Gas Holding Company (EGAS), who requested anonymity, told Al Manassa that the American company that owns the vessel, Energos Winter, will not bear the costs.

Instead, the source cited comprehensive insurance policies covering floating storage and regasification units (FSRUs). Unnamed insurance underwriters carry the operational and physical damage risks, including losses from fires and vessel downtime, pursuant to contracts and policies binding the ship’s owner, operators, and relevant stakeholders.

Under these contractual terms, the American side will avoid financial liability, shifting the burden to the counterparty through commercial insurance underwriters, the official stated.

The $50 million figure represents an initial estimate based on repair expenditures from analogous maritime fire cases, the source explained. 

The same official had cited the $50 million benchmark in comments to Al Manassa on Tuesday, without specifying at the time whether the operating firm or intermediary insurers would absorb the expenses.

The dispute stems from a July incident in which fires broke out aboard two vessels docked at Damietta port: the American-flagged Energos Winter and the GasLog Salem. The Egyptian government later confirmed that a drone attack sparked the blazes, stating that “no entity has claimed responsibility yet.”

Authorities have yet to identify who operated the drone. However, political and security analyses have warned that the strike threatens to pull Egypt deeper into the fallout of the US-Iranian war that has raged for months across the region.