Egypt's demand for gas has long outstripped its supply capacity. At an estimated $8bn this fiscal year, the cost of importing oil and gas is a drain on Egypt's economy. With most of the current oil and gas wells reaching maturity, this situation will only get worse. However, new gas reserve discoveries, changes in government policy and foreign investment look to boost Egypt's gas production to not only negate the deficit but to allow them to export LNG. Presenters at the Offshore Technology Conference in Houston stated that they believed Egypt could significantly reduce its LNG imports as soon as 2018 and they anticipate that they could increase their gas production by more than 90bn m3 by 2022.
Zohr gas field discovery
A major factor in these optimistic predictions is the recent discovery of the Zohr gas field. It is around 100km2 and estimated to contain around 850bn m3 of gas. Higher gas prices, negotiated by the Egyptian government, have encouraged them and Italian gas producers, Eni, to fast-track Zohr's development and try to bring it online by the end of 2017. It is expected to yield around 37bn m3 a year. Claudio Descaliz, CEO of Eni, stated that work had already begun on the site and he anticipates that, although most of the gas will be sold to the domestic market, there is capacity in Egypt's two LNG export terminals to liquefy gas for export.
Other New Developments
In addition to Zohr, a large number of other operations are either expanding, starting or in the planning stage. A major one is the West Nile Delta project, which involves the development of five fields: – Taurus, Libra, Giza, Fayoum and Raven – located about 65-85 km off the coast of Alexandria. Production is predicted to start in 2017 and yield around 12.5bn m3 of gas a year. Energy companies are exploring further discoveries in this area, which could add another 12bn m3 to 16bn m3 a year to the Egyptian gas grid. In addition to the West Nile Delta, foreign investment is driving development of gas fields all over Egypt.
UK fuel company BP is continuing to invest heavily in various gas fields around Egypt. In conjunction with other companies, BP is expanding developments in the Abu Madi West block in the Nile Delta, the West Nile Delta and East Nile Delta, amongst others. The discovery of Zohr and other sites have encouraged further exploration and BP’s North Africa regional President, Hesham Mekawi, said, "There is still a lot of gas to be found in Egypt in the Mediterranean."
With the discovery of new gas fields and the potential to discover many more, Egypt is set to increase its gas production to the point where it could become not only self-sufficient, but an exporter of LNG in the near future.
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