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Monday, 22 February 2021

We’re taking big strides towards our energy hub ambitions

The Damietta LNG plant is (finally) back online after eight years of being idled, with two liquefied natural gas shipments making their way out of the Damietta Port yesterday, marking a key step towards our ambitions to become an energy hub and boost natgas exports to Europe. An LNG carrier from the Marshall Islands is transporting 60k tonnes of LNG from Egypt to Bangladesh, according to a cabinet statement. A separate trial shipment is also being loaded onto a carrier owned by energy and commodities trader Vitol, and will make its way to Europe, Oil Ministry spokesperson Hamdy Abdel Aziz told state-run MENA. Abdel Aziz did not specify how much Vitol’s carrier is shipping.

A QUICK REFRESHER- The reopening follows the settling of a dispute between Spain’s Naturgy, Italy’s Eni and the Egyptian government that arose years ago, in which Union Fenosa Gas (UFG) — a 50/50 JV between both companies that owns 80% of the facility — said the government had cut off flows to the liquefaction plant. Under the settlement, Naturgy agreed to exit Union Fenosa Gas in return for a USD 600 mn payment and most of UFG’s assets outside of Egypt. Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights.

Europe could be getting even more East Med gas through our liquefaction plants thanks to a pipeline Egypt and Israel have agreed to build that will connect Israel’s offshore Leviathan gas field to Egypt’s liquefaction plants. Oil Minister Tarek El Molla and Israeli Energy Minister Yuval Steinitz agreed on the planned pipeline during a meeting yesterday as part of the EastMed Gas Forum, according to an Oil Ministry statement. The pipeline will help Israel ramp up its exports to Europe, Steinitz told local Israeli media, Reuters reports. Leviathan’s offshore gas field came online in 2019 and supplies Egypt and Jordan.

Background: Israel’s Delek Drilling, a main operator of the Leviathan gas field, had said last year that it was mulling expanding its natural gas exports via Egypt’s Idku LNG terminal or by building its own floating terminal. At the time, the dispute over the Damietta plant had not yet been resolved, leaving Idku as Egypt’s only viable LNG terminal.

Egypt is also set to work with Palestine to develop the Gaza Marine gas field under an MoU EGAS Chairman Magdy Galal signed with Palestine Investment Fund Chairman Mohammed Mustafa yesterday, according to Wafa News Agency. Palestine is one of the founding members of the EastMed Gas Forum.

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