Back to the complete issue
Tuesday, 23 February 2021

Project “bring Damietta LNG back to life” to fully ratchet up on 15 March

EXCLUSIVE- Dispute that put Damietta LNG in a coma to end next month: It seems possible that the plant will be making regular scheduled shipments starting from next month, as a final agreement to establish a new ownership structure for the Damietta LNG plant is due to be finalized on 15 March, Oil Ministry spokesperson Hamdy Abdel Aziz tells us. The move would put the final nail in the coffin of a dispute that has delayed operations at the plant for eight years. The plant was brought back to life recently, a few months after operator Eni reached an agreement with the government and Spain’s Naturgy.This will see Naturgy exit Union Fenosa Gas (UFG) — a 50/50 JV with Eni that owns 80% of the facility. The first shipment left earlier this week to Bangladesh carrying 60k tonnes of LNG on a carrier bearing the flag of the Marshall Islands, cabinet said on Sunday.

Who will own what? Eni will get 50% of the plant, state-owned EGAS will hold 40%, and EGPC the remaining 10%. Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights, a statement from Eni in December said.

The dispute’s origins: UFG filed a case against Egypt at the World Bank’s International Centre for Settlement of Investment Disputes for disruption to gas flows to the liquefaction plant. The arbitrator decided the government should pay USD 2 bn in settlements to the foreign JV.

Damietta LNG plant to make its next shipment next week: Damietta will run a series of trial shipments to test the health of the facility, with the next shipment expected to leave our ports and make its way, likely to Europe, Aziz told us, confirming reports in the local press today. He did not reveal just how much gas will be shipped out.

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. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank 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; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.