From: Arab Finance
Cairo: Egypt is poised to become a regional liquefied natural gas (LNG) trading hub thanks to booming natural gas production from recent discoveries, existing LNG infrastructure and strategic agreements it is seeking with eastern Mediterranean countries to import gas for processing and re-export.
However, economic and technical challenges could delay that hub from being created and, despite having eliminated its own need for LNG imports in the last quarter of 2018 due to surging domestic gas output, Cairo’s budget is hurting from costly imports of other fuels.
Egyptian Oil Minister Tarek el-Molla announced in September that Cairo had received its last LNG shipment dedicated for domestic consumption, making the country self-sufficient in natural gas, an achievement expected to save the Egyptian government approximately $2 billion annually and help finance a budget deficit exacerbated by higher crude prices that raised the costs of importing fuels such as benzene, diesel and butane. Those imported fuels cost Cairo as much as $450 million a month.
Egypt is enjoying a natural gas boom in part due to the rapid development of its giant offshore Zohr gas field, discovered in 2015. Zohr, which began production in January 2018, saw output expand six-fold in its first nine months of operation, reaching 2 billion cubic feet per day (bcfd) in September. The field’s operator, Italian energy firm Eni, anticipates the Zohr field reaching its plateau production in excess of 2.7 bcfd by the end of 2019.
Zohr — with gas reserves of 30 trillion cubic feet — is considered the largest gas discovery in the Mediterranean. As impressive as the Zohr field has proved to be, there is heightened interest in the nearby offshore Noor field, which was discovered by Eni last summer and could hold larger reserves than Zohr. The potential of the Noor field enticed European oil giant BP and Abu Dhabi state fund Mubadala to buy 25% and 20% stakes, respectively, from concession holder Eni in December. Source: Almal News