LNG nation Egypt to seek ethane imports from the US made from shale gas to avert fertiliser and food crises
Egypt, the nation with oil and gas reserves and which imports and exports LNG, is now planning to secure large quantities of US ethane made from shale gas to avoid shortages of fertilisers and a food crisis because of an acute shortage of natural gas in the domestic market.
Egypt expects to reopen Damietta LNG plant by end of February to boost Mediterranean shipments
Egypt said it expected to reopen the Damietta liquefied natural gas export plant east of the Port of Alexandria by the end of February 2021 after an eight-year closure caused by the Arab nation’s previous gas supply crunch.
“With Damietta back on stream with its 4.5 million tonnes per annum of output, Egyptian export volumes would total around 12.5 MTPA,” said the Petroleum and Mineral Resources Ministry in a statement.
The move forward for Damietta comes after the resolution during the latter part of 2020 of a long-standing dispute between the shareholders over contracts because of the closure.
Naturgy, the Spain-based European utility, agreed to sell its stake in the Damietta plant and to rescind its Egyptian gas contracts on departing from the Unión Fenosa Gas (UFG) joint venture.
Naturgy’s UFG partners, Italian energy company Eni and the Egyptian Natural Gas Holding Company (Egas) reached the agreement under which Naturgy would receive a series of payments adding up to US$600 million.
The utility will also receive most of UFG’s assets outside of Egypt as well as being released from 3.5 billion cubic metres annual gas procurement contract to supply its gas-fired power stations in Spain, which was due to end 2029.
Settlement
Under the settlement deal, these Spanish interests would be taken over by Eni.
The LNG plant has been idle since November 2012 when Egypt suffered natural gas shortages.
In addition to Damietta LNG, Egypt has a second export plant, the Idku facility operated by Royal Dutch Shell, and which has been back in commercial operation since 2017.
As regards Damietta plant shareholdings, the Naturgy 80 percent in Damietta liquefaction was transferred with Eni receiving 50 percent and 30 percent going to EGAS.
The resulting shareholding of the Damietta holding company, Segas, sees Eni with 50 percent, EGAS holding 40 percent and Egyptian General Petroleum Corp. with 10 percent.
Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights.
