Friday,22 September, 2017
Current issue | Issue 1345, (18 - 24 May 2017)
Friday,22 September, 2017
Issue 1345, (18 - 24 May 2017)

Ahram Weekly

Cutting back on imported gas

Ahmed Ismail looks at the latest developments in Egypt’s energy sector

New natural gas discoveries are coming online
New natural gas discoveries are coming online

The Egyptian Natural Gas Holding Company (EGAS) aims to cut down on imports of liquefied natural gas starting next year, as natural gas production kicks in at the Zohr Field operated by the Italian company Eni.
 
“When gas production begins at the Zohr Field, Egypt’s gas production will be more than six billion cubic feet (bcf) a day,” said one source who preferred to remain anonymous. “This will reduce the gap between domestic consumption and production and result in less gas being imported.”

He added that Egypt’s natural gas production rose last week after the start of the North Alexandria Project to reach 5.2 bcf of natural gas a day. “Our goal is to raise the domestic production of natural gas this year to six bcf a day,” he said.

EGAS expects total average consumption of natural gas in Egypt to reach 6.5 bcf a day this year, a 4.5 per cent increase compared to last year. According to the company’s plans, the electricity sector’s consumption of natural gas will rise by six per cent compared to last year to reach more than five bcf a day.

President Abdel-Fattah Al-Sisi inaugurated the North Alexandria Project operated by British Petroleum (BP) this week, and production at the start of the first phase is estimated at 700 million cubic feet of natural gas.

According to the source, EGAS will not change its plans for imported liquefied natural gas this year. “When we made our plans, we knew the dates when production at the new projects would begin, and the company’s plan is to greatly reduce gas imports next year,” he said, adding that EGAS plans to import more than 96 shipments of liquefied gas this year.

EGAS addresses the gap between consumption and production by importing gas. It issued an international tender for importing liquefied gas at the beginning of this year, and signed contracts with Oman, the Russian company Rosneft, and France’s Engie to import around 60 shipments this year, with up to six months as a grace period for payment.

Around 45 shipments have been signed and sealed.

Minister of Petroleum and Mineral Resources Tarek Al-Molla said his ministry would increase production of natural gas to five bcf daily in 2017/2018, up from the current 4.35 bcf. EGAS will then raise production in 2018/2019 to 6.8 bcf, he said.

The source said that the Nawras Field operated by BP had raised daily domestic production to 850 million cubic feet. EGAS’ plan to increase domestic production of natural gas is based on starting operations at Zohr Field at one bcf daily by the end of 2017, as well as BP’s production of 700 million cubic feet daily.
 
Production at Zohr will peak in 2020 at 2.7 bcf daily, according to projections by Eni, the company that discovered the gas field. The North Alexandria Field will peak in 2019 at 1.2 bcf a day.

Medhat Youssef, former vice president of the Egyptian General Petroleum Corporation (EGPC), said Egypt’s production of natural gas would rise as a result of gas discoveries and go beyond five bcf a day.
 
“By 2020, Egypt’s production will be plentiful, and the excess will be exported to profit the foreign partners,” Youssef said. He added that new discoveries would mean that the liquefaction factories that closed in 2011 would reopen and would make a profit.

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