LNG

Italian energy company Eni and US major Chevron Corp. have made a “significant” gas discovery in the Eastern Mediterranean Sea offshore Egypt in a follow up for Eni on its huge Zohr gas field that enabled the Egyptians again to become LNG exporters.

Oct 28 (LNGJ) - Italian energy major Eni posted an almost five-fold increase in third-quarter net profits to €5.86 ($5.87M) compared with €1.20Bln in the same three months of 2021. “We plan to replace at least 50 percent of Russian gas flows this winter, leveraging on our broad and diversified reserve base, our long-standing relationships with producing countries and our growing presence in LNG,” said Eni Chief Executive Claudio Descalzi.

   “In the quarter we further enhanced our position in the gas supply chain via our exploration activities, the upstream acquisition of BP assets in Algeria and, on the midstream side, the purchase of the ‘Tango FLNG’ liquefaction vessel as part of the Congo gas valorization project,” added the CEO.

Russian natural gas pipeline supplier Gazprom said it was ready in technical terms to build new gas pipelines to Turkey via the Black Sea and building on existing TurkStream and BlueStream links rather than restoring the damaged Nord Stream pipelines linked to Germany under the Baltic Sea.

Eni, the Italian energy major and significant liquefied natural gas developer and market participant, said it agreed to acquire natural gas fields in Algeria from UK major BP because of the “great strategic value” they now held.

Italian oil and gas company and LNG project developer Eni said on July 11 that the Russian pipeline gas company Gazprom was further reducing its supplies.

Most of Gazprom’s European Union pipeline natural gas customers are set to open new bank accounts with Gazprombank to meet Russian demands for the payment of volumes to be made in Russian roubles.

The two Egyptian liquefaction plants located near the port of Alexandra will remain low-cost options for East Mediterranean natural gas producers such as Egypt itself, Israel and the island of Cyprus looking to export LNG and to use the existing capacity for 12.7 million tonnes per annum.

Egypt is seeking to build up exports of LNG from their facilities at Idku and Damietta and future LNG production has been discussed at a three-day energy conference in Cairo held at the Egypt International Exhibition Centre.

The Idku LNG export plant first came on stream in 2005 and has capacity to export up to 7.2 million tonnes per annum from two liquefaction Trains. It has two storage tabs with a combined capacity of 280,000 cubic metres.

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

The Damietta plant is still idle but the resolution of a legal dispute between the owners and the Egyptian government has now been resolved.

The facility has capacity of 5.5 MTPA of output and has two storage tanks each of 150,000 cubic metres capacity.

Damietta is owned by Union Fenosa Gas, a joint venture between Spain’s Gas Natural, now known as Naturgy, and Eni. They hold 80 percent of the shares and the remaining 20 percent belongs to Egyptian Natural Gas Holdings Co. (EGAS) and Egyptian General Petroleum Co.

The head of Shell in Egypt, Gasser Hanter, played down the idea of any remaining political obstacles to bringing feed-gas supplies to Egypt from countries such as Israel or Cyprus.

He pointed to Egypt's hosting of an East Mediterranean Gas Forum in January 2019 that brought together governmental representatives from the region and recent commercial agreements.

“I think we're in the normal project development stage. You just have to go through the project development process,” said Hanter.

In recent months Israel has agreed to send pipeline exports to Egypt, while Cyprus has reached a provisional deal for sending pipeline supplies from its Aphrodite gas field.

Hanter said the economics of Egypt's LNG export plants remained compelling.

“Partly, this was because the Egyptian plants had been built in a different commercial environment, and costs had since risen,” he said.

“If you want to build something similar to that today, you're looking at a large number of billions of dollars,” added Hanter.

Noble Energy, the US company with natural gas assets in the East Med offshore Israel, signed multiple infrastructure agreements in September 2018 to support delivery of natural gas from the Israeli Leviathan and Tamar fields to Egypt.

Noble said the accords were significant steps forward in supplying natural gas to regional customers through existing infrastructure.

The US company’s partners in the Tamar and Leviathan fields are subsidiaries of Israel’s Delek Group.

Noble operates the Leviathan and Tamar fields with just under a 40 percent holding. Tamar has been on stream since 2013 and supplies Israel and customers in Jordan, while the Leviathan field is scheduled to come on stream in 2019.

Noble said that its agreements would secure capacity to deliver natural gas to Egyptian company Dolphinus from the Leviathan field while also allowing for interruptible sales from Tamar into Egypt.

Noble said it was acquiring an effective 39 percent equity interest with Middle East partners in the Eastern Mediterranean Gas Company (EMG), which owns the EMG pipeline.

The EMG Pipeline is 90 kilometres in length and is located primarily offshore, connecting the Israel pipeline network from Ashkelon to the Egyptian pipeline network near El Arish.

Abu Dhabi National Oil Company, the producer of oil and LNG for the United Arab Emirates, has concluded one of the largest ever deals for refining assets by selling a one-fifth shareholding to Italian energy company Eni for $3.9 billion as the UAE seeks to fund a long extension of LNG output and additional exploration and production activities.

Italian energy company Eni signed an agreement for the sale of a 20 percent interest to Mubadala Petroleum from Eni’s share in the Nour North Sinai Offshore block after Mubadala had previously invested in the Zohr field that enabled the Egyptians to re-start LNG exports.

Italian energy company Eni and Spanish partner Naturgy Energy Group are in talks to reopen the Egyptian Damietta LNG export plant near the East Mediterranean port of Alexandria, now that an arbitration dispute has been settled.