LNG

Naturgy Group, the Spanish global utility company with LNG supplies from the US and Russia and natural gas and utility businesses in Spain and South America as well as renewables projects in Europe, the US and Australia, reported a first-half surge in revenues and net profits.

Naturgy Energy Group, the Spanish global utility company with LNG supplies from the US and Russia and natural gas and utility businesses in South America as well as renewables in the US and Australia, reported a more than 40 percent rise in annual net profits and an increase in gross earnings of over 7 percent.

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.

Italian company Eni, one of the biggest energy players in Egypt, said it was trying to find an agreement to allow the restart of the idled Damietta LNG export facility, located east of Alexandria, and one of two Egyptian liquefaction facilities on the East Mediterranean coast.

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.

Egypt is being obliged to pay over US$2 billion plus interest and legal costs after losing an international tribunal dispute to Union Fenosa Gas for the unilateral interruption of gas supply to UFG’s liquefaction plant in Damietta, near the Mediterranean port of Alexandria.