LNG

Höegh LNG Holdings, the owner and operator of 13 LNG vessels including floating storage and regasification (FSRU) units, said an FSRU chartered to Australia will be deployed beforehand to Egypt to improve the Arab nation’s energy security.

Chevron Corp., the US energy major and global LNG producer, has re-started production from the Tamar natural gas field supplying Israel, Jordan and Egypt from East Mediterranean platforms and pipelines following its closure for more than a month by the Israeli government in the wake of attacks against Israeli civilians by Hamas terrorists from the Gaza Strip.

SDX Energy, the UK-based oil and gas exploration, production, and development company with working interests in natural gas fields in Egypt and Morocco after a string of discoveries in 2017 and 2018, is facing a takeover battle and may have to bring more cash to the table for existing shareholders.

UK Stock Exchange-listed SDX Energy has been informed by London-headquartered Aleph Commodities Limited that it now commands over 25 percent of the share capital of the company and intends to block an all-share takeover proposed by Canadian company Tenaz Energy Corp. of Calgary, Alberta.

“Through public disclosures and communication with SDX, we have been informed that a shareholder intends to vote against the proposed Scheme of Arrangement to amalgamate Tenaz and SDX,” said a Tenaz Energy statement.

SDX's portfolio includes high impact exploration opportunities in both Egypt and Morocco as well as producing assets in Morocco’s Gharb Basin and the Egyptian Nile Delta.

Natural gas assets in Egypt are the focus of possible LNG or pipeline gas exports and in the case of Morocco domestic gas projects.

Tenaz Energy explained that the takeover required, among other things, that 75 percent of the shares voted by SDX shareholders support the combination for it to become effective.

Strategy change

The Canadian company has now said that it reserved the right to elect to implement the transaction by way of a takeover offer in compliance with the UK Takeover Code and through a co-operation agreement with SDX.

“We are evaluating all available options with respect to the transaction and will provide a further update when appropriate,” stated Tenaz Energy.

A statement from Aleph Commodities by way of explanation made several points on behalf of itself and other parties, who together hold 25.65 percent of the shares.

It stated that the group of shareholders led by Aleph Commodities intended to vote against the recommended all-share combination.

“The shareholder meetings relating to the Scheme of Arrangement are due to be held on 29 July 2022,” noted Aleph Commodities.

“Aleph welcomes the opportunity to engage with management and the Board of Directors to explore opportunities to provide financial, commercial and technical support to SDX to ensure the growth of the company and its production base, with minimal dilution,” it stated

SDX Energy has a working interest in two producing assets in Egypt, a 36.9 percent operated interest in the South Disouq and Ibn Yunus gas fields and a 67.0 percent operated interest in the Ibn Yunus North gas field in the Nile Delta.

It additionally holds a 50 percent non-operated interest in the West Gharib concession, which is located onshore in Egypt’s Eastern Desert, adjacent to the Gulf of Suez.

In Morocco, SDX has a 75 percent working interest in four development and production concessions, all situated in the Gharb Basin.

The producing assets in Morocco are characterised by “attractive gas prices and exceptionally low operating” costs.

May 4 (LNGJ) - The Klaipeda LNG import terminal in the Baltic state of Lithuania, operated by energy company AB Klaipedos Nafta, said it expected to receive its first cargo from Egypt to help replace some Norwegian shipments halted by the Hammerfest plant shutdown. The cargo was lifted from the Royal Dutch Shell-operated Idku export plant, located east of the port of Alexandria. It is scheduled to arrive on May 7 in Lithuania from the East Mediterranean on board the 164,700 cubic metres capacity LNG carrier, the “LNG Fukurokuju”.

Egypt plans to construct a $7.5-billion petrochemicals, energy and bunkering complex at Ain Sokhna in the Gulf of Suex where it previously imported LNG during the era of natural gas shortages before the Zohr gas field and other discoveries were made in the Eastern Mediterranean and the Nile Basin.

The Egyptian government said the facility would be constructed on a 3.65 million square metres site and is the latest instalment in the country’s comeback story as an LNG exporter and now with plans to build its East Med energy hub.

The deal to develop the complex is between the Red Sea National Refining and Petrochemicals Company and the Suez Canal Economic Zone's development company. They aim to produce value-added petroleum products to fill Egypt's domestic needs and enable exports.

“The products include polyethylene, polypropylene, polyester, bunkering fuel and other petroleum and chemical products,” said a statement.

Egypt’s gas crisis during the “Arab Spring” social upheavals in North Africa and the Middle East in 2014 led to the diversion of natural gas supplies away from LNG production to meet growing domestic demand and to avoid power cuts.

The Gulf of Suez is a main transit point for global shipping and the development of bunkering will be part of the business.

Before the bringing on stream of the Zohr field in the East Med in 2017, Egypt had been forced to import LNG from 2015 in two floating storage and regasification units deployed at Ain Sokhna.

The Egyptians halted LNG imports two years ago and have now started regular exports of LNG from their two liquefaction facilities at Idku and Damietta, east of the port of Alexandria.

The Idku LNG export plant has been on stream again since 2017 under the operatorship of Royal Dutch Shell, which acquired original operator BG Group.

The Damietta facility only re-started operations and exports in February 2021.

With Damietta back on stream, Egypt added 4.5 million tonnes per annum of LNG output to its export volumes now totalling 12.5 MTPA.

The move forward for Damietta came after the resolution of  a long-standing dispute between the shareholders over contracts because of the closure.

Naturgy Energy, 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 Eni company and the Egyptian Natural Gas Holding Company (Egas), reached the agreement under which Naturgy received a series of payments adding up to US$600 million.

Eni has taken over the contract for the purchase of natural gas for the LNG plant and receives corresponding liquefaction rights.

Italian energy company Eni said Egypt was on track to regain its former full LNG export capacity as the first cargo was shipped from the Damietta plant east of Alexandria, shut down in 2012, firstly because of feed-gas shortages and then from 2017 over a dispute among shareholders.

Eni said the re-start was made possible after an agreement was reached in December 2020 aimed at settling all disputes between the shareholders linked to the long shutdown.

“At this stage the agreement has already received all the authorizations of the competent authorities and its final closing is expected in the first half of March,” explained Eni.

“The agreement comes at an important moment, when also thanks to the fast time to market of Eni's natural gas discoveries, especially the ones in the Zohr and Nooros fields, Egypt has regained its full capacity to meet domestic gas demand and can allocate surplus production for export through its LNG plants,” stated Eni.

With Damietta back on stream, Egypt can add 4.5 million tonnes per annum of output to its export volumes now totalling 12.5 MTPA.

The move forward for Damietta came after the resolution of the 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, 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 Spanish utility is also receiving most of UFG’s assets outside of Egypt as well as being released from the 3.5 billion cubic metres annual gas procurement contract to supply its gas-fired power stations in Spain, which was due to end 2029.

Under the settlement deal, these Spanish interests are being taken over by Eni.

The Damietta LNG plant had 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 sees Eni with 50 percent, EGAS holding 40 percent and Egyptian General Petroleum Corp. with 10 percent.

Eni has also taken over the contract for the purchase of natural gas for the plant and receives corresponding liquefaction rights.

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.

Naturgy, the Spain-based European utility with LNG volumes from the US and Russia and gas and power interests in Latin America, said it agreed to sell its stake in the Damietta LNG export plant in Egypt and to rescind its Egyptian gas contracts on departing from Unión Fenosa Gas (UFG) joint venture.

The East Mediterranean Gas Forum, grouping Israel, its Arab neighbours as well as the Palestinian Authority, Italy, Greece and Cyprus has been formalized to develop natural gas and economic development in the region.

Italy’s Eni and partners BP of the UK and French major Total have made a natural gas natural discovery in the North El Hammad block in the Mediterranean offshore Egypt, which has again become an LNG exporter because of other gas finds such as the Zohr field.