EU could provide as much as EUR 3.8 bn in financing to help Egypt transform into regional energy hub as two sides ink energy cooperation agreement: Egypt and the European Union signed a memorandum of understanding on energy cooperation yesterday that is widely expected to pave the way for Egypt to become a gas export hub to Europe. Under the four-year agreement — which covers cooperation on electricity, as well as oil and gas — the EU and Egypt will work together to help the country realize its goal of becoming a regional hub for LNG exports through continued support and the adoption of new energy efficiency strategies, the EU and Egypt said in a joint release. Egypt could receive as much as EUR 3.8 bn in funding for energy projects, EU Energy Commissioner Miguel Arias Cañete told the press yesterday, Al Masry Al Youm reports.

Egypt becomes part of EU energy security framework: The EU will also provide Egypt with support on renewable energy through “technological, scientific, and industrial cooperation… [as it] recognizes Egypt’s active participation in the ongoing Euro-Mediterranean energy cooperation and the country’s growing pivotal role in energy supply and transit to the Euro-Mediterranean energy market,” the statement said, adding that the agreement will “contribute to fulfilling the EU’s strategic objectives to enhance security of supply and diversification.”

Background: The agreement was signed during Cañete’s visit to Cairo, which wraps up today, during which he has been meeting with top state officials, including President Abdel Fattah El Sisi, and the heads of European oil majors in Egypt to discuss ways to further boost energy cooperation. Energy cooperation talks with the EU had started in December, after Cairo reached a preliminary agreement with Nicosia to establish a pipeline connecting the Cypriot Aphrodite field to one of Egypt’s liquefaction plants in Idku or Damietta for re-export to Europe. Egypt’s Dolphinus Holdings has also signed a similar-style agreement with Israel worth USD 15 bn. The EU has extended Egypt EUR 300 mn in energy support grants so far, according to an EU handout picked up by Al Mal. Oil Minister Tarek El Molla had previously said that Egypt would be ready to export natural gas by year’s end, once new fields, including the supergiant Zohr, begin feeding more output into the grid.

Egypt is ready to become an LNG exporter, Qalaa Holding Founder and Chairman Ahmed Heikal tells CNBC, citing new gas discoveries as well as Egypt’s liquefaction capacities as proof to investors that “Egypt is ready to perform a very important role as a hub for energy, especially gas exports.” El Molla had said on Sunday that Egypt was looking to attract as much as USD 10 bn in new foreign investments in the oil and gas sector in FY2018-19.