Egypt detects 354 new coronavirus cases, 12 deaths on Monday    Egypt condemns Houthi attack on Saudi fuel distribution terminal    Sisi, telecom company Orange discuss increasing cooperation in Egypt    Cairo International Book Fair suspended for five months over coronavirus concerns    Suspension of CAF boss Ahmad opens elections race wide open    GCC countries surpass 1 million COVID-19 cases: Reuters Tally    AstraZeneca novel COVID-19 vaccine can be 90% effective, results show    Egypt's military production minister, S. Korean ambassador discuss boosting industrial cooperation    UN urges civilian protection after Ethiopia's 72-hr deadline for Tigrayan forces    Orascom Development inks $265m loan deal with four banks    International Energy Agency tailors a plan for post COVID-19    Egypt-Kenya bilateral trade hits $303m in H1-20    Suarez says Uruguay players let guard down after spate of COVID-19 cases    Polling stations open at home for 1st stage of Egyptian parliamentary run-offs    Liverpool coach Klopp blasts broadcasters over hectic match schedule    Biden expected to nominate Blinken as secretary of state    Egypt detects 351 new coronavirus cases, 13 deaths on Sunday    Egyptian president inaugurates Middle East and Africa Smart Transportation Fair    Winners of the 5th Sharm El-Sheikh Int'l Theatre Festival for Youth    Egypt confirms 358 new coronavirus cases, 14 deaths on Saturday    BREAKING: Sudan decides not to participate in ministerial meeting on GERD Saturday    G20 to discuss post-pandemic world, back debt relief    First day of Egypt's parliamentary runoffs kicks off for expats    US will reduce number of its troop in Iraq, Afghanistan    Don't miss the concerts of the 12th Cairo International Jazz Festival    Asia forms world's biggest trade bloc, a China-backed group excluding U.S    Egypt unveils largest archaeological discovery in 2020 with over 100 intact sarcophagi    Palestinians mourn the loss their longtime spokesman, Saeb Erekat    Egypt, Ethiopia, Sudan to resume Nile dam talks today    Trump says won't blame Egypt for being ‘upset' over GERD dispute with Ethiopia    1st stage of Egypt's parliamentary elections kicks off on Saturday    Global Finance: Egypt's Tarek Amer among the world's top 20 central bank governors    Legend footballer Lionel Messi says he is forced to stay with Barcelona    Iraqi conglomerate eyes developing land that housed Mubarak-era ruling party HQ    Famous Egyptian actor Mahmoud Yassin passes away at 79    Legend Messi officially wants to leave Barcelona, hands transfer request    The Facebook Preacher's Search for Fame, and Egypt's Economy    Egypt calls on UNSC to address oil spill risks off Yemen coast    Egypt economically strong in face of COVID-19, reforms ongoing: International Cooperation Minister    Arafa Holding reports $144,000 COVID-19-related losses in April    Egypt's efforts in Libya to activate free will of Libyan people: Al-Sisi    Hyksos campaigns were internal takeover, not foreign invaders: study    COVID-19 affects Egypt sporting clubs    COVID-19 will soon turn to seasonal like swine flu: Presidential Health Advisor    ‘Egypt's Support' coalition convenes to discuss its Senate election list    Robbery attempt leads to discovery of Ptolemaic monuments in Qena    Flouting international guidance, Ethiopia unilaterally starts filling its Nile dam    Zaha speaks out after online racial abuse    







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





Shell in talks with government to increase natural gas supply
Shell is currently in talks with the government in order to increase exports, as the government seeks to increase supply to the domestic market
Published in Daily News Egypt on 12 - 10 - 2016

The Egyptian government is slowly moving closer to increasing the domestic energy supply and restarting liquefied natural gas (LNG) exports, as the government continues negotiations with Shell to raise the volume of gas sent to the Idku LNG plant. Shell confirmed reports that they are exploring options to increase domestic supply, but expressed doubts about Egypt's export potential. Despite the short-term skepticism, Egypt's long-term potential in becoming a major player in natural gas production may be a foregone conclusion.

Shell's Middle East operations spokesperson Nureddin Wefati stated: "Shell's Idku gas treatment and liquefaction facilities, whether subsea or onshore, provide an economic edge for Egypt. Due to known gas supply issues, we expect very limited cargoes to be lifted of Egyptian LNG. Shell is in ongoing talks with interested parties and continues to investigate options for increasing the supply of natural gas to the country."

The Egyptian General Petroleum Corporation (EGPC) paid Shell $480m in September in bank instalments for Idku supply disruptions, which has not operated at full capacity since 2012. The plant—in which Shell owns a 35.5% stake, Petronas 35.5%, Engie 5%, and Egyptian Natural Gas Holding Company (EGAS) and EGPC 24%—requires $200m to repay loans annually after a $2bn loan for expansion.

Sources in EGAS state that Egypt owes Shell $1.3bn as of July—a sum that has likely increased due to unpaid production at the Borollos and Rashid fields. In total, Egypt owes $3.6bn to international oil companies.

The Egyptian government has since increased volumes for production at Idku, but they still remain considerably less than what was contractually agreed upon, due to domestic political and economic considerations during the peak summer months.
International oil companies are trying to pressure the Egyptian government into increasing exports, as the terms of agreement make exports nearly three times as profitable as selling to the government.
By allowing Shell to begin exporting, authorities are hoping it will prevent the oil companies from taking legal action against the government, like the long-running arbitration case brought by Union Fenosa Gas over the shutdown of supply to its Damietta plant. This provides an incentive for Shell to produce more at a vulnerable period for the government's financial obligations.
Petroleum Minister Tarek El Molla stated that production at the Idku plant could be supplemented by regional partners who have also made major natural gas discoveries in the Mediterranean region. A proposed pipeline between Cyprus and Egypt was made; however, this may take years to complete. Egypt's rapprochement with Israel is largely seen as being driven by natural gas considerations from which both countries could profit immensely.

"If Egypt could return to its previous position as a major exporter, and that's a big and longer term ‘if', it would make a material difference to the world's future supply-demand balance," James Taverner, an analyst for IHS Inc told Bloomberg in June, adding that in the meantime that exports will come occasionally.


Clic here to read the story from its source.