European major Total crowns Mozambique LNG funding with substantial gas discovery offshore Egypt

Wednesday, 29 July 2020
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Three European energy majors and prominent LNG market participants, Total, BP and Eni have confirmed a substantial East Mediterranean natural gas discovery in the North El Hammad block located 11 kilometres offshore Egypt.

Total said that along with its partners, BP of the UK and Eni of Italy, the Bashrush well in the North El Hammad licence area encountered 102 metres net gas pay in high quality sandstones of the Abu Madi formation.

“A production test was conducted with flow rates of up to 32 million standard cubic feet of gas per day, limited by testing facilities,” said Total.

“It is estimated that future deliverability per well will be up to 100 MMscf per day, along with up to 800 barrels of condensate per day,” explained the Paris-based company.

“Future plans foresee development through tie-in to nearby existing infrastructures,” stated Total.

Kevin McLachlan, Senior Vice President Exploration at Total, said the discovery was a boost for the company, whose most prominent venture at the moment is the fully funded Mozambique LNG export project in southeast Africa,

“We are very pleased to announce this discovery in Egypt. These results support our strategy to allocate a significant share of our exploration budget to the search of hydrocarbons in the vicinity of existing infrastructures,” added McLachlan.

“These resources have low development costs since they can rapidly be tie-in and put into production,” he stated.

Total holds a working interest of 25 percent in the North El Hammad licence, alongside operator Eni with 37.5 percent and BP with 37.5 percent.

Total confirmed in July 2020 that full project financing was in place for the Mozambique LNG project using Area 1 feed-gas in the Rovuma Basin.

The joint venture companies in Mozambique have signed a $14.9-billion senior debt financing agreement proposed to construct a two-Train liquefaction plant with a total capacity of 13.1 million tonnes per annum.

Total said that the Mozambican venture represented a total post-financial investment decision outlay of $20Bln.

The Area 1 shareholding has Total as operator with a 26.5 percent participating interest alongside ENH with 15 percent.

Japan’s Mitsui & Co. owns 20 percent, India’s ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each hold 10 percent and Thailand’s PTTEP 8.5 percent.

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