Egypt is back again into the club of major exporters of liquefied natural gas (LNG) after halting exports in 2014. The North African country had set the end of 2018 target for natural gas self-sufficiency, and now moving ahead in their quest to become a regional hub for energy trading by liquefying gas and exporting it.
Having successfully weaned itself of natural gas import, Cairo exported 300 million cubic feet per day of LNG in 2018 and by January 2019, its LNG export grew to about 520 million cubic feet per day. At present, the country is exporting 800 million cubic feet per day from Idku by Malaysia’s Petronas, Royal Dutch Shell, and Egypt’s two main state oil and gas companies, Tarek El-Molla, the petroleum minister said.
For April 2019, the state gas company, Egyptian Natural Gas Holding Company (EGAS), tendered to sell four cargoes of LNG for loading. The bids are valid until March 25. The company is also marketing four cargoes for loading in May and three for June.
“The speed and scale of which Egypt has turned from importer to notable exporter is likely to further loosen the already wide supply/demand balance,” Nick Campbell, a director at industry consultant Inspired Energy Plc, said.
Egypt’s extra supplies came at the time LNG market is battling with the lowest spot prices since July 2017 following a mild winter that curbed demand across Europe and Asia. But should Nigeria panic about its market share?
“Essentially, we are sold out. I have committed contracts; short, medium, long terms. At this moment, spot trading does not mean much to us at NLNG”, Tony Attah Managing Director/Chief Executive Officer of Nigeria LNG Limited, told Businessday on the sidelines of Gastech Conference in Barcelona, Spain late 2018.
It is also noteworthy that the US, Russia and Australia are all contributing to the glut, starting new plants to export the fuel and build market share.
“The advantage we have is that we are not green, we already have off-takers who have tasted us and know what we can do. We are not as exposed to the new fundamentals in the market around short or long term but we are quite flexible to leverage the situation. In the end, it is about value and it is how you can create a better value today”, Attah said.
Egypt’s revival was built on a run of discoveries and bringing them online on schedule. Eni’s Nooros is churning out 900 million cubic feet of gas daily, becoming Egypt’s biggest producing field since it came on stream late in 2015. Production from two BP fields in the West Nile Delta development, Taurus and Libra, started eight months ahead of schedule. Its North Alexandria gas fields are set to boost output as well.
The giant Zohr gas field was discovered in 2015 by the Italian energy company Eni and is the largest ever natural gas find in the Mediterranean Sea with around 30 trillion cubic feet of gas reserves. Zohr gas field is currently producing two billion cubic feet per day (bcfd) of natural gas, equivalent to about 365,000 barrels of oil equivalent per day (boed).
Eni also announced recently that it made another gas discovery under evaluation in the Nour exploration prospect located in the Nour North Sinai Concession, in the Eastern Egyptian Mediterranean, about 50 km North of the Sinai peninsula.
FRANK UZUEGBUNAM
