Zohr gas field goes live
More good news this morning: The Zohr gas field goes live, bringing us one-step closer to energy self-sufficiency and becoming an exporter of gas. Gas from Zohr is being pumped to a treatment facility in Port Said city before delivery to the national grid at an initial rate of 350 mcf/d, Oil Minister Tarek El Molla said in a statement Saturday. Output is set to rise to about 1 bcf/d in June and 2.7 bcf/d by the end of 2019, he said. "One of the biggest issues Egypt had over the past years was the big shift in its energy balance from a net exporter to a net importer because of an increase in consumption versus a decline in production. With the new gas finds, it’s returning to this balance, if not exporting, then at least there’s no deficit," EFG Hermes economist Mohamed Abu Basha tells Bloomberg. The move brings Egypt closer to its goal of becoming a regional energy hub by 2018.
And it could not come at a better time as far as Europe is concerned: With Zohr, Egypt looks firmly set to cement its place among a small but growing list of African LNG exporters looking to capitalize on growing demand from Europe. The premium for LNG supplies into northeast Asia, the biggest buyer, over southwestern Europe narrowed to USD 0.80 per mmBtu this week from as high as USD 2 in October, according to prices published by World Gas Intelligence. “Demand for LNG is growing three times faster than pipeline gas,” said Claudio Steuer, senior visiting research fellow at the Oxford Institute for Energy Studies, tells Bloomberg. Ship tracker Pan Eurasian Enterprises says all extra production capacity in Africa will help to feed expanding need, especially in Europe.
In other regional gas news, Total, Eni, Novatek won Lebanon’s first offshore licenses on Thursday, according to Bloomberg. The companies had won the rights in October to jointly explore blocks 4 and 9 — the latter which is in an area disputed by Israel. Lebanon is working with the U.S. on resolving the dispute, according to Prime Minister Saad Hariri. The move follows years of delays which have allowed Lebanon to lag behind Egypt, Cyprus and Israel in East Mediterranean finds.