Egypt’s position as regional hub secure as LNG demand looks set to grow
Israel’s LNG export dreams look increasingly dependent on Egypt: It is increasingly clear that an agreement between Cyprus, Greece, and Israel reached last December to proceed with an East Med pipeline will not give Israel the edge to exporting the region’s gas to Europe without Egypt, according to an analysis piece from Haaretz. For one, Cyprus and Israel are in dispute over the delineation of their respective East Med gas fields. Israel is also engaged in a maritime border dispute with Lebanon, and Turkey is actively trying to block Cyprus’ bid to exploit its gas fields. In an interview with the Cypriot news agency CNA earlier this month, Oil Minister Tarek El Molla said it best when he noted that feasibility study for the project would take up to two years, “which in itself is a luxury the region can’t afford any more.” Egypt, he added, was the lowest-cost option for exporting the region’s gas.
As Egypt secures its role as the region’s gas export hub, Shell sees demand for LNG growing in the next few decades, according to the the company’s LNG Outlook 2019 report (pdf). Natural gas is expected to account for 41% of total growth in demand for energy until 2035, according to the report. This makes gas the largest source of growth in global energy usage over that period. Global trade for LNG grew 10% in 2018 to 319 mn tonnes, bolstered by strong demand in Asia, particularly China and South Korea. China’s increasing demand for cleaner fuel is expected to be among the primary drivers behind the growth of LNG over the next two decades.
Egypt’s LNG imports fell 4% y-o-y in 2018, the report also noted.
Shell’s Idku increases exports of LNG to 800 mcf/d: Speaking of Shell, the company’s Idku liquefaction plant has increased exports of natural gas to 800 mcf/d, up from 500 mcf/d at the beginning of this year, El Molla told the domestic press.