EGP declines vs. USD at Thursday's close    Euro area inflation rises to 2.0% in October '24 – flash estimates    IF YOU LOVE SOMEONE WHO SMOKES, GIVE THEM THE FACTS    Asian stocks slide as chip sector weakens    Egypt's Minister of Environment highlights biodiversity issues at COP16    Egypt's Agriculture Minister meets Syrian, Bahraini counterparts to boost cooperation in Amman    Al-Qassam Brigades targets Israeli vehicles in eastern Gaza    ACUD, DP World, and GAFI sign MoU to develop free zone in New Capital    Egyptian government encourages increased mutual investment with Bahrain: Finance Minister    A Tale of Two Cities: Alexandria hosts 2nd edition of exhibition celebrating Greek, Egyptian cultural ties    Egypt, Djibouti leaders discuss strengthening ties, regional issues    Egypt's FM affirms commitment to Sahel security, offers support to Niger    Egyptian banking sector support underprivileged communities in Alexandria – CBE    Afghanistan signs $163m deal for cement plant    US tightens tech investment rules for China    Biden unveils $3b investment to strengthen US port infrastructure    Military Production, Environment Ministers inaugurate banana fiber recycling plant    Luxor Museum to host exhibition on 19th century antiquities inspection tours    Nourhan Kamal Wins 2024 Helmi Sharawy Award for African Studies    Egypt observes Intl. E-waste Day, highlights recycling efforts    Egypt's military capabilities sufficient to defend country: Al-Sisi    Al-Sisi emphasises water security is Egypt's top priority amid Nile River concerns    Cairo Opera House hosts grand opening of Arab Music Festival, Conference    Grand Egyptian Museum ready for partial trial run on October 16: PM    Colombia unveils $40b investment plan for climate transition    Kabaddi: Ancient Indian sport gaining popularity in Egypt    Ecuador's drought forces further power cuts    Al-Sisi orders sports system overhaul after Paris Olympics    Basketball Africa League Future Pros returns for 2nd season    Egypt joins Africa's FEDA    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Paris Olympics opening draws record viewers    Who leads the economic portfolios in Egypt's new Cabinet?    Financial literacy becomes extremely important – EGX official    Motaz Azaiza mural in Manchester tribute to Palestinian journalists    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    Egypt records 36 new deaths from Covid-19, highest since mid June    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Towards self-sufficiency in gas?
Published in Al-Ahram Weekly on 10 - 01 - 2018

Egypt's Zohr Field, the largest offshore natural gas field in the Mediterranean, started production on 16 December. It could prove to be a permanent remedy to Egypt's power needs and bring it closer to the goal of self-sufficiency in the energy sector in 2018.
The supergiant field covers an area of about 100 square km, with estimated reserves of 30 trillion cubic feet and expected initial production of 350 million cubic feet per day. This is expected to rise to about one billion cubic feet by next June and then to 2.7 billion cubic feet by the end of 2019.
The field's output would cover the gap between Egypt's total gas consumption, standing at 4.9 billion cubic feet per day in 2016, and its total daily production of four billion cubic feet, according to data from the British Petroleum (BP) Statistical Review.
It could enable Egypt to return to exporting gas as soon as 2019. The country was a net exporter of gas for ten years before an energy crisis hit in 2013 when foreign companies stopped operations as they had not been paid their dues by the government, pushing Egypt to tap export markets.
This was followed by Egypt's purchasing 89 cargoes of liquefied natural gas (LNG) from international suppliers in 2015/2016 at a cost of $2.2 billion, according to Egypt's Petroleum Ministry.
Initial production from the Zohr Field is equivalent to three LNG cargoes a month at a cost of $90 million, according to the Petroleum Ministry. Meanwhile, the cost of local production does not exceed $30 million, which means that Egypt would be saving $60 million on a monthly basis.
The Zohr Field is not the only newly discovered gas field off the Egyptian coast. The North Alexandria and Nooros fields will, together with Zohr, raise Egypt's natural gas output by 50 per cent in 2018 and 100 per cent in 2020. “The three fields together will contribute to natural gas self-sufficiency by the end of 2018,” Petroleum Minister Tarek Al-Molla said recently.
Foreign investors are keen to capitalise on the gas sector's potential. Italian oil giant Eni, which discovered the Zohr Field, intends to pump investments of $3.5 billion into Egypt in 2018, representing half the company's annual investments.
BP has started gas production from the Taurus and Libra Fields in the West Nile Delta Field off Egypt's coast. These currently add 700 million cubic feet of gas a day to the Egyptian national grid.
The West Nile Delta development includes five offshore gas fields that could have a combined production of up to almost 1.5 billion cubic feet a day in 2019. This gas will also be fed into the national grid.
The government is expected to issue another tender for LNG purchases in early 2018 to cover the country's needs for the second quarter of the year. It plans to stop importing the fuel by the end of next year because of the gas from the Zohr Field.
The government has also taken other steps to encourage energy investment in Egypt. Under Law 196 from August last year, private businesses will be allowed to transport and trade gas using the country's pipeline network and infrastructure, moving away from a state monopoly, said Amira Al-Mazni, former vice-chairman of the National Gas Authority EGAS.
The law is part of a push by the government to spur investment in the economy. Over the past year, the government, backed by the International Monetary Fund, has enacted economic reforms that have included floating the currency, cutting subsidies and passing legislation to attract foreign investment.
Egypt has also adopted a flexible gas-pricing formula to encourage such investment. It previously paid a fixed price of $2.65 per 1,000 cubic feet. Talks are being held to price the gas at $4 per 1,000 cubic feet.
The Zohr Field's output should satisfy the domestic market, with the nation's two existing gas-liquefaction facilities being large enough to process the huge quantities of excess gas for export in 2019. If the Zohr and other gas fields generate more supplies, Egypt may consider adding a third LNG-exporting terminal, Al-Molla said.
Egypt can also become a gas-exporting hub as the sector has many advantageous features. In addition to abundant supply, thanks to the newly discovered fields, Egypt has 19 plants for natural gas treatment and two liquefying facilities with total capacities of 12 million tons per year.
Egypt has two floating deliquefying facilities with a total capacity of 1,300 million cubic feet per day. Osama Mobarez, head of Development of the Petroleum Sector at the Ministry of Petroleum, said Egypt's strategic location together with its proximity to main international trade routes and the presence of Suez Canal enabled it to be a regional energy hub, being able to liquefy and store gas if necessary.
Law 196 is an important addition as it allows the private sector to directly ship, transport, store, market and trade natural gas using the pipeline and network infrastructure.
It also relieves the government from the burden of providing for the rapidly growing natural-gas consumption and turns it into a regulator, a practice common to countries that have liberalised their markets and freed them from state monopolies, said Hafez Al-Salmawi, an energy expert at the World Bank.


Clic here to read the story from its source.