Egypt outlines LNG export plans and progress on Red Sea exploration and tender proposals

Monday, 08 April 2019
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Egypt said its rising natural gas surplus through 2020 would be used to satisfy demand from the power and industry sectors and to meet LNG export obligations as its overall output reaches more than 5 billion cubic feet per day.

The Egyptian Petroleum and Mineral Resources Minister, Tarek El Molla, addressed the nation’s natural gas output targets at a World Economic Forum meeting held at a Dead Sea resort at southern Shuneh in Jordan.

El Molla said he was pleased with the output from Egypt’s natural gas fields on the West Nile Delta, at Noor in North Sinai, the Atoll field in the East Nile Delta and the giant Zohr resources in the East Mediterranean.

The Minister noted that Egypt had recently launched an international tender for new exploration licences in 10 areas of the Red Sea where it would also have cooperation from Saudi Arabia.

El Molla held talks with his Saudi counterpart Khaled el Faleh on means of boosting joint cooperation.

“The two ministers exchanged views on opportunities of oil and gas exploration in the Red Sea and means of intensifying search and exploration operations in the coming phase,” said a statement.

At the same time the Egyptian minister said the nation was pursuing LNG exports from the Idku liquefaction plant near Alexandria, which resumed in 2017, and was also set to restart production at the nearby Damietta LNG facility.

“We are exporting 1.1 billion cubic feet per day and we expect that by the end of the year this figure will go up to 2 bcf per day, and this is when we resume the operation of the Damietta plant,” said El Molla.

“The second plant is expected to operate within this year,” added the Minister.

On the Red Sea tenders, interested companies have been given until August to submit their bids for the 10 licences to be issued on the production-sharing model and covering an area of 3,000 square kilometres.

“We are preparing to become an energy hub as everybody knows we have a fantastic geographical location between the Red Sea and the Mediterranean,” said El Molla.

“We also have important infrastructure, the Suez Canal, LNG plants in Damietta and Port Said, refineries on two coasts and the Sumed pipeline running from the Gulf of Suez to offshore Alexandria,” he explained.

“For example, we’ve signed agreements with Cyprus to bring their gas here, whether for our domestic use or to export on their behalf through our LNG facilities. There’s an opportunity to do the same with any other gas in the Eastern Mediterranean basin,” added the minister.

The start of production at the Zohr field by Italian energy company Eni in 2016 transformed the country from being an importer to again being an exporter.

As regards its import facilities in the form of two floating storage and regasification units (FSRUs) deployed at the port of Ain Sokhna in the Gulf of Suez, one FSRU would continue to be in operation for strategic reasons.

“The regasification plant, which is the FSRU standing at Ain Sokhna, is going to be there for strategic reasons but on idle mode,” he added.

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