Back to the complete issue
Thursday, 6 September 2018

Egypt taking steps to resolve UGS dispute over Damietta supply interruptions

Egypt is taking steps to settle the USD 2 bn it has been ordered to pay Spanish-Italian JV Union Fenosa Gas (UGS) over gas supply interruptions at the Damietta liquefaction plant, the Oil Ministry said in a statement picked up by Reuters. (The Oil Ministry’s website was down at dispatch time.) Details on what the steps entail were not disclosed, but the statement is the first official line on the issue since the World Bank’s International Centre for Settlement of Investment Disputes issued the ruling earlier this week. Sources said the payments would be made in the form of new gas shipments. UGS — a joint venture between Spain’s Naturgy and Italy’s Eni — had filed the case against Egypt some years ago, complaining that the government had cut off flows to its Damietta liquefaction plant, of which it owns 80%. Sources said on Tuesday that the government was willing to resolve the dispute, as the move could expedite the resumption of LNG exports and help put Egypt on the map as a regional energy export hub.

Speaking of which, the Oil Ministry is reportedly planning to end its five-year contract for the Höegh Gallant FSRU in mid-September after a number of wells, including from Zohr, are connected to the grid, an EGAS source said. The decision comes as Egypt’s gas production is expected to reach 6.75 mcf/d by then, bringing us closer to a cessation of gas import tenders. The source noted that Egypt does plan to hold on to one FSRU should the need arise to import gas. It could also be converted to a floating liquefaction and storage unit (FLSU).

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.