Natural gas waits for no bureaucracy, and consumers clamor for energy no matter what. Cairo cannot wait for Jerusalem to untangle its political squabbling and eternal red tape.
Instead, Italian energy company Eni was given the green light to search for more gas off Egypt’s Mediterranean coast, and along the Nile, according to UPI Business News.
This week, the company announced its efforts have met with success.
Italian energy company Eni said in a statement to media, “Preliminary estimates of the discovery account for a potential of 530 billion cubic feet of gas in place with upside, plus associated condensates.”
The firm signed two off-shore deep-water Mediterranean exploration agreements in January after a 2013 auction held by Cairo. The exploration follows a $5 billion framework agreement signed in March to develop Egypt’s oil and gas reserves.
The new reservoir was found in the Nooros exploration prospect in the Abu Madi West license area, about 75 miles northeast of Alexandria, according to the report. The discovery is emblematic of the company’s strategy to “focus on Egyptian assets close to existing infrastructure and with high resource potential,” Eni said in its statement.
The new discovery will go into production by September, using nearby existing gas treatment facilities, UPI reported. Eni has been operating in Egypt since 1954. The company currently has an equity production of some 210,000 barrels of oil equivalent per day.
One month ago, Emirati energy firm Dana Gas also announced plans to launch a new drilling campaign in Egypt. Under the deal, Dana will have the right to sell the government’s share of the reserves.
Israeli Energy Exports to Egypt As far back as April 2014, Israel and Egypt have been discussing a deal to export Israel’s natural gas to Cairo. Deals were already signed by Israel with Jordan and the Palestinian Authority despite the diplomatic friction with the latter.
This past February, the Noble Energy-Delek Group which owns the mammoth Israeli Leviathan gas field sent a delegation to Cairo to discuss Israeli gas export to Egypt from the offshore Tamar gas field. The gas would flow to Egypt’s Damietta LNG (liquified natural gas) plant, according to Egyptian oil ministry sources who spoke with Reuters.
The Egyptian government finalized a long-delayed deal for an LNG import terminal and has already reached an agreement to import gas from Algeria. Talks between Cairo and Russia are continuing.
Egypt is also negotiating for gas imports from the Aphrodite reservoir in Block 12 of Cyprus. The island nation recently nixed a bid to import gas from Israel’s Leviathan field for its own domestic use, due to the ongoing snarl of red tape that has been tying up industrial progress on Leviathan in general.
Noble-Delek Talks with BG in Egypt Noble-Delek group, meanwhile, is doing its best to carry on despite the Israeli penchant for bureaucracy. The group remains in talks with Britain’s British Gas (BG) Group that runs one of Egypt’s LNG plants, as well as with the Egyptian Dolphinus Group.
The consortium spent most of last year discussing the deal to build the $2.2 billion 10 billion cubic meter (bcm) sub-sea pipeline to link up with the BG facility, to be completed by 2023.
The group also signed a letter of intent with BG that states “if Leviathan is not developed on schedule, Aphrodite will supply them with the gas they need,” according to an industry source. A similar letter of intent to sell 2.5 b.cu.m. annually to Dolphinus was signed several months ago, using the Tamar field as the source for the gas. The partners said at the time the gas could flow for private industry within 2015.