British pound climbs as government makes U-turn on tax cut plan    Egypt's net foreign assets decline again to reach $925 million in August    Turkey's inflation jumps to 83% highest level in nearly in 24 years    Egypt's FM heads to Congo Today to attend PRECOP27 conference    King Charles III won't attend COP27 in Egypt, following PM Truss advice    Swedish coastguard says: Fourth leak discovered on Nord Stream pipelines    Egyptian gecko invades Israel    Egypt welcomes back Russian flights on 1st October    Egypt launches 200 Years of Continuing Science tourism campaign    Egypt, UAE partner on sustainable waste management in Sharm el-Sheikh ahead of COP27    QNB Group names TikToker Khaby Lame official FIFA World Cup Qatar 2022 brand ambassador    Three possible scenarios as Egypt's central bank governor resigns – MP    Adele is living a love story, wants to be a homemaker    In Photos: Egypt swears in 13 new ministers after major Cabinet reshuffle    Egypt's Sisi names 13 ministers in Cabinet reshuffle    Spain: prosecutor seeks 8 years sentence for Shakira over tax evasion    Egypt: Alamein Art Festival kicks off a collection of recycled installations    Egypt's athlete Basma Emad wins bronze in weightlifting in Mediterranean Games    Maha karara joins AAIB as Head of Corporate Communications, Sustainability    Egypt works on charting cooperation strategies with international institutions for 5 years: Al-Mashat    Over 2.4 million newborns examined for hearing impairment: Health Ministry    Netflix releases trailer of Arab adaption of 'Perfect Strangers' film    Balqees to headline concert celebrating launch of streaming giant LIVENow in MENA    Sawsan Badr to be honoured at Aswan Women Film Festival    MP Abdel Hady Al-Qasby calls government to facilitate and support NGOs    Al-Sisi follows up on 'Great Transfiguration Project' in St. Catherine    Cairo, London stress need to strengthen cooperation to face climate change    Foreigners account for 22.6% of Egypt's T-bills issuances in 1H 2021: CBE    Egypt's ambassador to Italy passes away    Egypt confirms readiness to help African countries face terrorism and extremism    An estimated 235 million people needed humanitarian assistance and protection in 2021, an increase of 40% compared to 2020: IOM Egypt    Egypt, DRC discuss water cooperation during WYF    Egypt, DR Congo discuss boosting bilateral cooperation during WYF    Cameroonian police probe assault on three Algerian journalists covering AFCON    Pharaohs start AFCON 2021 campaign with fierce clash against Nigeria    Foreign Ministry opens capacity building course for French-speaking African diplomats    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    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    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.



Bright prospects for natural gas
Published in Al-Ahram Weekly on 02 - 10 - 2003

Natural gas projects in Egypt are experiencing a boom. Sherine Nasr reports
The past few years have seen a rapid growth in natural gas production in Egypt. A natural gas grid some 4700 kilometres long has been constructed in the country since the early 1990s, more fields have been discovered and further reserves proven. As a result of this expansion, Egypt is now among the leading 10 countries in the world regarding the scale of natural gas operations.
These ongoing activities have encouraged more international companies to enter Egypt. "At present, there are some 50 companies working in the gas and oil sector in Egypt and investing two billion dollars annually," said Mohamed Ibrahim Tawila, chairman of Egypt Gas (EGAS) during the second Mediterranean Gas Congress, organised by MEED (the Middle East Economic Digest) in Cairo last week.
Egyptian natural gas production began in 1975, in the western desert field of Abu Madi. Two years later, the field of Abu Qir on the northern coast was opened.
It was not until the early 1990s that foreign oil companies began to really enter the picture, funding exploration for natural gas in Egypt. A series of natural gas reserves were quickly discovered in the Nile Delta, offshore from the Nile Delta and in the Western Desert. In 1997, plans to develop the giant Hapi gas field at Ras Al-Barr in the Nile Delta region were announced at an estimated cost of $248 million. In September 2000, the field came on stream and has reached an output of 280 million cubic feet per day.
Recent studies have calculated that about 84 per cent of the natural gas reserves worldwide are concentrated in the Middle East, with Egypt possessing some 60 trillion cubic feet of proven gas reserves yet to be tapped.
In 2001, EGAS was established by governmental decree as the authority responsible for all the gas-related operations, including exploration, implementation of gas projects and transportation.
"Natural gas is the fastest growing form of energy to be put in use in different local fields," said Hany Soliman, vice chairman for operation in EGAS.
At present, the average daily gas production has reached 3.4 billion standard cubic feet. Natural gas provides 90 per cent coverage of the total demand of the power generation sector which consumes up to 61 per cent of the total produced natural gas in Egypt. "Many of the power generating stations have turned to this environment-friendly form of energy, thus saving the earth from large amounts of harmful carbon dioxide," commented Soliman.
Fertilisers come second on the list with almost 11 per cent consumption of the total natural gas production, while industry uses up to nine per cent. "The amount is expected to increase as many factories in the new industrial zones are converting to natural gas," said Soliman.
More gas is now available to the petrochemical sector, which represents another up and coming sector in Egypt. A massive petrochemical complex, affiliated with the Sidi Krir Petroleum Company, has commenced operations and now has a daily output of 5000 tonnes of ethane and 1900 tonnes of propane, and is aiming for a daily production capacity of 3500 tonnes of butane by 2008.
Availability of gas to residential customers has been concomitantly expanding. Currently, 47,000 vehicles have been converted to natural gas. These are being serviced nationwide by 35 conversion centres and 73 fuelling stations.
"The current daily gas consumption is around 2.6 billion cubic feet, representing about 45 per cent of the primary energy consumption in the country," said Soliman.
This year, Egypt began exporting natural gas, completing a pipeline which reaches from Al-Arish on the Mediterranean coast to Aqaba in Jordan. The second phase is to construct a 370km transmission pipeline from Aqaba to Rebah by 2005.
"The pipeline will further extend to Syria, Lebanon, Cyprus and Europe," said Soliman.
Meantime, the largest Liquefied Natural Gas (LNG) hubs are now under construction in Idku and Demietta in the Nile Valley. "The eyes of the world have been very much on the LNG market in Egypt," said Stuart Fysh, the country manager of British Gas (BG) in Egypt. "By the completion of the two LNG hubs in 2007, Egypt will be the sixth largest LNG exporter worldwide," Fysh added.
The first LNG export agreement was signed in 2001 and later endorsed by the People's Assembly in 2002. A consortium of BG, Edison (later acquired by Petronas), Gas de France, the Egyptian General Petroleum Corporation (EGPC) and EGAS took the responsibility of establishing the West Delta Deep Marine hub at Idku, near Alexandria, described by experts as "one of the most significant LNG export hubs on the Mediterranean".
The $1.7 billion Idku hub is being established with a design capacity of 3.6 million tonnes per year. It will start exporting by 2005 and long-term sales and purchase agreements have been signed for the next 20 years.
The second hub in Demietta is a joint project of EGAS and Union Fenosa, with a design capacity of 7.5 billion cubic metres per year to start exporting to Spain and other Mediterranean countries by the end of 2004.
"We have invested $800 million this year on the site, a pledge for a one billion dollar fund has been made, and many international banks have shown interest in taking part in the project," said John Earl, CEO of the Egyptian LNG project.
Both projects will expand their capability in the future, once more gas reserves and purchase agreements are secured.
"It is quite obvious that Egypt is in a comfortable position with regards its natural gas options," commented Fysh who added that Egypt has already extracted much of the "easy gas" and that, "deep horizons have not been touched yet".
However, it is still crucial for Egypt to strike the right balance between its growing local demand for natural gas, its medium-term obligations and long-term export plans to best utilise this prospering industry.


Clic here to read the story from its source.