Production

Egypt set to keep Eni's Gas Find for Itself

Thursday, 03 September 2015 21:41

There has been heightening competition among gas producers in the Middle East and Africa over Egypt’s plan to keep all the natural gas produced at a giant field Eni SpA found off its Mediterranean coast to itself.

Eni said recently that the deep-water deposit in the Zohr Prospect in the Shorouk block may hold 30 tcf of fuel, making it the biggest gas discovery in the Mediterranean Sea.

All the production will go to internal consumption,” Hamdy Abdel Aziz, director of the Egyptian Petroleum Ministry’s information department, told Oil and gas people. The field’s reserves can meet Egypt’s needs for more than 10 years, he said.

Gas output in Egypt has been declining since 2011. Local demand for electricity; most of it generated by gas, is increasing by more than 7% a year, and the nation, with almost 87 million people, started buying liquefied natural gas (LNG)cargoes this year from companies including Noble Group Ltd, BP Plc and Vitol SA.

According to a report published by the London consultant Energy Aspects Ltd, Eni will accomplish a “significant level” of production at Zohr in about 2018 or 2019, as the deposit lies close to fields that are already in operation and can be tied into their infrastructure.

This field is now in competition with the ones in Cyprus, Israel, Mozambique, Tanzania and Iran,” Thierry Bros, an analyst at Societe Generale SA in Paris, said. “But as we are short of growing demand, especially in Europe, and short of money, only projects that will find a win-win solution with buyers will go ahead.

To Energy Aspects, the Zohr discovery will affect Israel’s plans to export fuel from its own offshore Leviathan field, by removing the option of liquefying Israeli gas for export at existing but disused facilities in Egypt. Gas from Zohr could enable Egypt to restart its own LNG exports by providing feedstock for Eni’s dormant export facility at Damietta or freeing up gas for export from BG Group Plc’s facility at Idku.

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