LNG

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.

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.

The Egyptian Natural Gas Holding Co. (EGAS), the government-run energy company with stakes in Egypt’s two LNG export plants and other gas field assets, has established a subsidiary in Saudi Arabia to help attract more investment.

Egypt's Ministry of Petroleum said that the Saudi unit had been set up by EGAS with initial capital of 2 million Saudi riyals ($533,000).

The Egyptians said in their statement that EGAS would own 80 percent of the venture called “Modern Gas Saudi Arabia” and explained that it would be part of the Egypt’s strategy for offshore expansion in the East Mediterranean in cooperation with other Arab nations such as the United Arab Emirates.

EGAS has various stakes, direct and indirect, in Egypt’s expansive oil and gas assets and the two LNG export plants, Damietta and Idku, located east of the port city of Alexandria.

ADNOC-BP deal

Abu Dhabi National Oil Company (ADNOC) and UK major BP said in Mid-February 2024 that they planned to form a joint venture in Egypt that would initially focus on natural gas and incorporate Egyptian concession stakes held by BP.

That joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the East Med gas and LNG province after the planned acquisition of a 50 percent stake in Israeli gas producer NewMed Energy.

Negotiations on the proposed NewMed agreement for BP and ADNOC started in March 2023, though have now been officially suspended.

As part of the agreement for Egyptian expansion and energy investment by ADNOC, BP will contribute its interests in three development concessions, as well as exploration agreements in Egypt to the new joint venture.

ADNOC will make a proportionate cash contribution which can be used for future growth opportunities.

Gas fields

This is the first major natural gas deal for BP under new Chief Executive Murray Auchincloss.

Both companies said that this new joint venture partnership would enhance Egyptian energy security and the economic potential of the region’s most populous Arab country.

The natural gas concession to be included in the Egyptian joint venture include BP’s 10 percent in the Shorouk block containing Egypt’s huge Zohr gas field.

BP’s 100-percent owned North Damietta interests are also included along with BP’s 50-percent stake in the North El Burg concession with the undeveloped Satis field.

Three other exploration concession included are North El Tabya, Bellatrix-Seti East and the North El Fayrouz block.

Mubadala Energy, the international company headquartered in Abu Dhabi in the United Arab Emirates, has made one of the largest natural gas discoveries this year with LNG potential offshore Indonesia in the Andaman Sea.

Egypt said it was planning to drill around 35 new exploratory natural gas wells in the Eastern Mediterranean and the Nile Delta by 2025 with $1.8 billion in investments in joint ventures with oil and gas majors and with a view to increasing liquefied natural gas production.

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.

TotalEnergies Chairman and Chief Executive Patrick Pouyanné has met Lebanese Minister of Energy and Water Walid Fayad at the French major’s Paris headquarters to mobilize drilling teams for the Block 9 offshore resource that will make Lebanon an energy producer in what is becoming the Eastern Mediterranean LNG and pipeline gas hub.

Egypt’s Petroleum and Mineral Resources Minister Tareq El-Molla has said that Egypt was ready to meet more of the increased demand for natural gas in Europe as its LNG exports have increased to 8 million tonnes per annum in 2022 and the capacity is there for growth in 2023.

“Efforts exerted over the past years have made of Egypt one of the solutions to the ongoing energy problem,” said the Minister in a keynote speech to the eighth Egypt Oil and Gas Convention on November 27 in Cairo.

The convention was taking place at the Dusit Thani Lakeview Hotel in the Egyptian capital through November 29.

El-Molla noted that Egypt had the capacity to export up to 12 MTPA of LNG annually from the two plants located east of the Mediterranean city of Alexandria.

He said that out of the total of LNG cargo exports from the Idku LNG plant and the Damietta facility about 90 percent were delivered to Europe.

He noted that the successes of the petroleum sector in Egypt was due to the integrated strategy of partnerships between the public and private sectors and was fully supported by the government of President Abdel Fattah El-Sisi.

“The petroleum sector is also seeking mechanisms of action that would maximize cooperation with international partners to be able to make optimal use of our natural resources,” said the Minister.

The Minister said that the strategy rested on increasing and sustaining oil and natural gas production while also reducing carbon emissions.

Feed-gas boosted

Egypt is set to increase LNG supplies by almost 30 percent this year compared with the 6.1MT shipped in 2021 as feed-gas supplies have stabilised.

The Minister added that Egypt's revenues from the exports of LNG, petrochemicals and petroleum products would amount in 2022 to $19 billion.

He said that Egypt was working towards developing energy sources of all kinds simultaneously, be they traditional energy sources, especially natural gas, or renewable sources like solar energy and wind.

Egypt’s previous natural gas shortages were solved by Eni’s Zohr gas field discovery in the East Med and other gas finds in the nation’s extensive oil and gas basins leading to a re-start of the Damietta LNG plant in February 2021 after it had been idle since the end of 2012.

The Egyptian domestic natural gas market also receives pipeline gas from Israel.

The Damietta facility has as its shareholders the Italian energy company Eni as well as two of Egypt’s state-owned companies, Egyptian Natural Gas Holding Company (EGAS) and Egyptian General Petroleum Corp. (EGPC).

The facility has nameplate capacity of 5 MTPA and with Eni owning 50 percent of the plant while EGAS and EGPC hold 40 percent and 10 percent respectively.

The second Egyptian plant, the Idku facility, has 7.2 MTPA of capacity from two Trains and is operated by Shell.

The Government of Ivory Coast has held talks on its large oil and gas discovery containing significant volumes of associated natural gas and offering the potential for its energy renaissance as a West African regional hub.

The third ministerial meeting of energy ministers is taking place of the 42-nation Union for the Mediterranean (UfM) and what is the biggest regional gathering of natural gas and LNG importers, exporters and developers.