As the EU Looks for More LNG, Egypt Prepares to Boost Output
Egyptian state-owned energy company EGAS has agreed to boost the nation's gas production and its LNG exports to the Italian market, helping Europe to replace volumes of Russian natural gas.
On Wednesday, EGAS announced an agreement with Italian energy major Eni to increase jointly operated gas projects and to maximize short-term gas production. The agreement will also expedite E&P in its Egyptian lease acreage.
Eni expects that these efforts will support LNG cargoes for Italy and the EU market on the order of about three billion cubic meters of gas this year. Taken on its own, this would be enough to replace about two percent of Russian gas deliveries to the European Union.
Eni is the largest oil and gas producer in Egypt, with an equity share of about 360,000 boepd of output. Over the long term, the company aspires to invest in decarbonizing its Egyptian operations through carbon-capture projects and renewables.
Today, Eni's primary operation in Egypt is the Zohr gas field in the Shorouk Block off the coast of Port Said. It is the largest gas field ever found in the Mediterranean, and it came online in late 2017. Its output feeds an LNG liquefaction and export terminal at Damietta, 25 nm to the east of Port Said. Russian oil major Rosneft also holds a 30 percent stake in the Zohr project.
The supply could help meet the policy objectives of the Italian government. To help diversify its energy mix, Italy is looking to import more LNG, and has made plans for securing two FSRUs to bring in more regasification capacity quickly.