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Wednesday, 26 October 2022

Cairo-hosted gas forum “concerned” about Europe’s price cap + a whole lot of regional energy diplomacy

Egypt was at the center of a big day for energy diplomacy in the region yesterday: Members of the Gas Exporting Countries Forum (GECF) used their annual meeting in Cairo yesterday to express their concern over European attempts to cap gas prices. We also got updates on:

  • Egyptian-Palestinian efforts to tap Gazan gas resources;
  • the Oil Ministry forging closer ties on energy with new best friend Qatar;
  • and an agreement to cooperate on oil and gas projects between us and Algeria.


Ministers from gas-producing countries voiced “great concern” over Europe’s bids to impose “politically-driven price caps” on natural gas. The EU is edging closer to agreeing to cap gas prices in response to the energy shock — and G7 nations are planning to impose a price cap on Russian oil in response to its invasion of Ukraine. But the forum — which counts Russia, Qatar and Egypt among its members — warned against the moves following a ministerial meeting yesterday. “Such artificial intervention in market functioning can only aggravate market tightness, discourage investment, and be detrimental to producers and consumers alike,” the forum said in a joint communique (pdf) following the talks in Cairo yesterday.


Gaza Marine gas field agreement on the horizon: Egypt’s state-owned EGAS and the Palestine Investment Fund are expected to sign an agreement to develop the Gaza Marine field during 1Q 2023, Oil Minister Tarek El Molla told Bloomberg Asharq yesterday on the sidelines of the forum (watch, runtime: 2:09).

Everyone is in agreement on a general framework, El Molla is cited as telling Reuters. Talks have reportedly involved Israeli and Palestinian Authority (PA) officials, as well as Hamas representatives. Only final technicalities and approvals from the PA still need to be secured, Reuters quotes an unnamed Palestinian official as saying.

More gas for our export hub ambitions: After EGAS extracts the gas, it will be brought to Egypt and liquefied either for re-export or local use, El Molla told Asharq, adding that a financial agreement with Palestinian authorities has not yet been finalized.

Background: EGAS signed an MoU on the project with the Palestine Investment Fund last year. Gas extraction is expected to begin within three years of signing the final agreement. The field, located 22 nautical miles off the coast of the Gaza Strip, contains an estimated stock of 1 tn cubic feet of gas, which could be pumped for 10 to 12 years.


Egypt + Qatar talk gas cooperation: El Molla and his Qatari counterpart Saad Al Kaabi talked about joint investment in oil and gas on the sidelines of the forum. Readouts from the Egyptian and Qatari sides provided few details on the talks.

Signs are that Qatar is becoming an ever-closer friend: The country is also eyeing investment in our ports and in local listed firms, after earlier this year pledging to invest as much as USD 5 bn in Egyptian companies as part of wider Gulf efforts to shore up our economy and provide us with vital FX.

Egypt and Algeria inked an MoU on oil and gas cooperation, according to a statement that will see the two countries cooperate on marketing, research, exploration, and production. They will also consider setting up a joint company which would manage oil and gas projects and eventually expand its activities across Africa. The two also agreed to cooperate on converting cars to run on natural gas, and to exchange expertise on their national hydrogen strategies.


A maritime border agreement between Israel and Lebanon will be inked on Thursday, Israeli Prime Minister Yair Lapid said earlier this week, Reuters reports. The US-mediated agreement represents a serious compromise between the two historically unfriendly neighbors, and is expected to pave the way for offshore gas exploration in the area.

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