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Tuesday, 6 November 2018

Oil Ministry is in talks with UGS to reduce Egypt’s USD 2 bn settlement payment over Damietta gas supply interruptions

The Oil Ministry is in talks with Spanish-Italian JV Union Fenosa Gas (UGS) to reduce a USD 2 bn settlement it has been ordered to pay over gas supply interruptions at the Damietta liquefaction plant, an unnamed ministry source said, according to Al Shorouk. According to the source, the ministry is also expected to resume gas shipments to the plant “in small quantities” in 2H2019 as part of the settlement agreement, which the World Bank’s International Centre for Settlement of Investment Disputes ordered in September. The ministry had said that Egypt is taking steps to settle the amount, without disclosing details on what the steps entail. UGS 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%. Settling the dispute could expedite the resumption of LNG exports and help put Egypt on the map as a regional energy export hub. Naturgy and Eni are also in “advanced talks” to re-launch operations at the Damietta facility, Eni CFO Massimo Mondazzi said last month.

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