The Egyptian Natural Gas Holding Co. (EGAS), the government-run energy company with stakes in Egypt’s two LNG export plants and other gas field assets, has established a subsidiary in Saudi Arabia to help attract more investment.
Egypt's Ministry of Petroleum said that the Saudi unit had been set up by EGAS with initial capital of 2 million Saudi riyals ($533,000).
The Egyptians said in their statement that EGAS would own 80 percent of the venture called “Modern Gas Saudi Arabia” and explained that it would be part of the Egypt’s strategy for offshore expansion in the East Mediterranean in cooperation with other Arab nations such as the United Arab Emirates.
EGAS has various stakes, direct and indirect, in Egypt’s expansive oil and gas assets and the two LNG export plants, Damietta and Idku, located east of the port city of Alexandria.
ADNOC-BP deal
Abu Dhabi National Oil Company (ADNOC) and UK major BP said in Mid-February 2024 that they planned to form a joint venture in Egypt that would initially focus on natural gas and incorporate Egyptian concession stakes held by BP.
That joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.
The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the East Med gas and LNG province after the planned acquisition of a 50 percent stake in Israeli gas producer NewMed Energy.
Negotiations on the proposed NewMed agreement for BP and ADNOC started in March 2023, though have now been officially suspended.
As part of the agreement for Egyptian expansion and energy investment by ADNOC, BP will contribute its interests in three development concessions, as well as exploration agreements in Egypt to the new joint venture.
ADNOC will make a proportionate cash contribution which can be used for future growth opportunities.
Gas fields
This is the first major natural gas deal for BP under new Chief Executive Murray Auchincloss.
Both companies said that this new joint venture partnership would enhance Egyptian energy security and the economic potential of the region’s most populous Arab country.
The natural gas concession to be included in the Egyptian joint venture include BP’s 10 percent in the Shorouk block containing Egypt’s huge Zohr gas field.
BP’s 100-percent owned North Damietta interests are also included along with BP’s 50-percent stake in the North El Burg concession with the undeveloped Satis field.
Three other exploration concession included are North El Tabya, Bellatrix-Seti East and the North El Fayrouz block.
