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Tuesday, 21 June 2022

Egypt signs agreement with Chevron to help us realize our gas hub ambitions

Will Chevron help give our gas hub ambitions a boost? EGAS signed an MoU with Chevron to explore ways to transport, import, liquefy, and re-export gas from the Eastern Mediterranean, according to a cabinet statement. The agreement will see the two companies work on developing infrastructure to transport gas from offshore fields to Egypt, where it can be liquefied and re-exported.

This comes a few days after we signed a landmark agreement to export Israeli gas to Europe: The agreement will see Israel send more gas to Egypt’s LNG facilities for re-export to Europe, and comes as the continent looks to phase out its reliance on Russian fossil fuels. The agreement will also see the three sides work together on the “efficient utilization” of infrastructure to increase gas shipments to the EU, as well as reduce methane emissions and explore carbon capture projects.

What they said: “Egypt has strong LNG infrastructure that can be attributed to the wealth of gas fields in the country and our strong partnerships with the EastMed region,” the statement quotes Oil Minister Tarek El Molla as saying.

What partnerships? Egypt is a founding member of the East Mediterranean Gas Forum, which brings together countries in the region to coordinate energy policy and develop the region’s gas reserves. The Oil Ministry has placed particular emphasis on building stronger ties with Israel, which currently supplies us with gas from its Tamar and Leviathan fields, and Cyprus and Greece.

We’re in need of new infrastructure: Egypt is looking to build new LNG terminals and pipelines to increase capacity and export volumes, including the link to Cyprus’ Aphrodite gas field, which the countries are expected to start constructing later this year, and a potential direct pipeline to Greece. El Molla said recently that without additional investment it could take two or three years before we are able to increase exports to Europe.

Chevron is also looking to expand its exploration operations in Egypt, the statement read. The US company has in recent years sought to step up its presence in the EastMed hydrocarbon sector, purchasing a 40% stake in Israel’s Leviathan field and 25% of Tamar in recent years.

The oil giant is looking to start drilling its first exploration well in the Mediterranean in September, the statement read. The Oil Ministry awarded Chevron and four other companies concessions in the Mediterranean, Red Sea and the Western Desert in 2020.

President Abdel Fattah El Sisi met with Chevron CEO Mike Wirth, where he expressed the state’s full support for Chevron’s activities in Egypt, Al Hayah Al Youm reports (watch, runtime: 3:09).

The story also got attention from Reuters.

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