Infrastructure: What’s to come in 2022? 2021 saw major leaps forward on a host of transportations projects to modernize urban and trans-governorate travel and overhaul our ailing railway networks, and companies struggled to maneuver their way through a global supply chain crisis that led to jammed shipping routes and materials shortages.
Looking ahead to 2022, we see two big themes likely to dominate infrastructure news: While transportation and supply chain woes will continue to feature prominently in 2022, It is safe to say that moves to realize our ambitions of becoming a regional energy hub. The big question, however, is whether ongoing supply disruptions and inflationary pressures will get in the way of our energy goals. Today, we breakdown why our energy hub ambitions could be closer to our reach this year.
The Damietta LNG plant got the ball rolling on our energy hub ambitions: Plans to become an energy hub and boost natgas exports to Europe got a kickstart when the Damietta LNG plant came back online in February after an eight-year hiatus. Thanks in part to resumption of the Damietta plant’s operations, Egypt’s LNG terminals were running at full capacity by December, exporting the equivalent of around 1.6 bn cubic feet per day (bcf/d) as we tried to capitalize on the surge in natural gas prices overseas.
The Oil Ministry wants to increase the amount of gas it pipes in from Israel for export exports to 600-650 mn cf/d in 1Q2022, up from 450 mn cf/d currently. Under the existing USD 19.5 bn agreement with Israel, Egypt currently imports 2.1 bcm a year, which will increase to 6.7 bcm from 2023 through to 2034.
Europe’s natgas woes have the potential to boost exports further: With no sign of a detente between Russia and its NATO rivals, the squeeze on European gas prices is expected to last into 2023. Egyptian oil shipments are expected to fall to 1 bcf/d next summer due to rising domestic consumption, according to Oil Minister Tarek El Molla. But in the longer term, Europe’s gas troubles could pave the way for Egypt to boost exports to the continent.
And rival energy projects seem to be falling through: Last week, Israel’s Environment Ministry may have temporarily scuttled a pipeline by which Israel hopes to export UAE oil while bypassing the Suez Canal, according to AP.
Key to the plan to ramp up exports to Europe: The East Mediterranean Gas Forum. Headquartered in Cairo, the regional organization was ratified by President Abdel Fattah El Sisi in September after its founding members signed the charter last year. It brings founding members Egypt, Cyprus, Greece, Israel, Italy, Jordan and Palestine together to collaborate on strategy, development and financing in the sector.
All potential pipelines lead to Egypt: The EMGF forum’s November meeting saw the Madbouly government sign agreements with Greece and Israel that could help it grow exports to Europe — including pipeline plans galore. Under the MoUs, we can expect to see Greece and Egypt work more closely on natgas this year, while a new subsea pipeline between the two countries could be in the works. Israeli imports for re-export should also ramp up, and a pipeline for Israeli gas is also under consideration. That’s in addition to the planned link between Cyprus’ Aphrodite natural gas field and Egypt, currently expected to come online in 2024 or 2025.
Expect electricity interconnection projects to light up 2022: Electricity interconnection agreements were all the rage last year. We inked agreements with Greece and Cyprus on the USD 4 bn EuroAfrica Interconnector project, which will connect the electrical grids of Egypt, Greece, and Cyprus by late 2023 — and made a separate pact with Cyprus that would also see us connect our electricity grids. Jordan and Egypt are also set to double capacity on the electricity link between the two countries, part of a larger project to eventually link Egypt’s grid to Libya, Palestine, Syria, Lebanon, Iraq and Turkey. Meanwhile, a consortium of Orascom Construction (OC) and Japan’s Hitachi ABB Power Grids is working on connecting our grid with Saudi Arabia’s by 2024.
NEXT WEEK- The second part of our infrastructure year ahead series will focus on another sector that is expected to be big in 2022: water. Enterprise dug up a number of water projects that will be worked on or completed next year and talked to industry experts to get their take on what the big trends will be and what challenges they face.
Your top infrastructure stories for the week:
Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.
Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.