Major LNG exports by Egypt seen unlikely

Even as production of natural gas rebounds next year, Egypt will have difficulty recovering its role as a steady exporter of LNG, says Facts Global Energy (FGE), London.

The country’s production fell below 4 bscfd in July from 6 bscfd in 2009 but will reverse course as major developments start coming on stream. FGE cites:

• Deepwater Zohr field, which will start production at 1 bscfd next year, increasing to 2.7 bscfd in 2019 after a second phase of development by Eni SPA and partners.

BP PLC’s West Nile Delta project, which will begin at 800 MMscfd-1 bscfd late in 2017 after tie-back of Giza and Fayoum fields to modified facilities at Rosetta integrated with a gas plant handing output from Raven field.

• BP’s development of offshore Atoll gas field, where production is expected to start at 300 MMscfd in the third quarter of 2018 (OGJ Online, June 20, 2016).

• Possible redevelopment of the West Delta Deep Marine block operated by Royal Dutch Shell PLC, where production has fallen to 250 MMscfd from more than 900 MMscfd in 2009 and the operator hasn’t sanctioned further investment. FGE says a redevelopment phase could start in the second half of 2008 if Shell signs a new agreement--but probably not at a rate able to offset declines.

Because domestic gas use is increasing, Egypt must rely on LNG, imports of which are expected to exceed 6 million tonnes this year after totaling 2.8 million tonnes last year.

The country has two floating storage and regasification units at the port of Ain Sukhna and plans to charter a third, to be moored at Safaga on the Red Sea.

FGE says Egyptian LNG imports might peak at 6.6 million tonnes in 2017 and decline to 5.4 million tonnes in 2018 as domestic production increases. But the country might still need 3.5-4 million tonnes of LNG in 2020.

Egyptian Natural Gas Holding Co. continues to load occasional cargoes of LNG at Idku and probably will continue to do so during the next 3-4 years, FGE says. The sales will help it pay debts to Shell and other producers.

But continuous operation of liquefaction plants is unlikely.

“In the longer term, Egypt is not expected to return into the LNG market at full capacity unless it ramps up its production through new gas discoveries or starts gas imports by pipeline from Mediterranean countries,” FGE says.

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