After crashing for 8 years … a giant Egyptian gas facility comes back to life

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It was announced "Eni" Italian and"Naturgy" Spanish, Thursday, they have reached an agreement with Egypt To settle a series of disputes over the plant, paving the way for the facility to resume operation by next June.

The agreement would end the commercial interests of"Naturgy" In Egypt, a joint venture was broken up "Naturgy" And"Eni"Meanwhile, the latter and Egyptian state-owned companies will raise their holdings in Damietta Factory.

The facility, which has a capacity of 7.56 billion cubic meters annually, has been suspended since the end of 2012, when gas supplies in Egypt were affected by successive fluctuations, and the government was forced to import gas to meet local demand.

But recent discoveries mean that Cairo now has a surplus of GasIt can export it via LNG plants.

Last year, Egypt exported more than 3 million tons of LNG, up from 1.5 million tons in 2018 and 850,000 tons in 2017.

The Damietta factory is 80% owned"Union Fenosa Gas (UFG)", A joint venture between "Eni" And"Naturgy", While the rest is divided equally between the Egyptian Natural Gas Holding Company (EGAS) andEgyptian General Petroleum Corporation.

Under Thursday’s agreement, the plant is currently 50 percent owned"Eni", And 40 percent for"Igas" And 10 percent for the Egyptian General Petroleum Corporation.

And I found out "Eni" field "Back" For gas, Egypt’s largest field ever, in 2015, and has another group of assets in Mediterranean sea.

The company will acquire a natural gas purchase contract for the Damietta plant and obtain equivalent LPG rights, which raises its LNG portfolio by 3.78 billion cubic meters annually.

Looking forward "Eni", Like other major international oil and gas companies, to strip their business of carbon, and believes that LNG and gas are important suppliers in that transformation.

Meanwhile, she praised "Naturgy" In agreement as a positive step in its plan to reduce its exposure to gas purchase contracts, knowing that the prices of liquefied gas are at their lowest levels in several years.

The Spanish company will also receive $ 600 million in cash and most assets "UFJ" The value of $ 300 million outside Egypt, excluding the company’s activities in Spain.

Since making management changes in 2018, it has focused "Naturgy" Reduce costs and exit from countries including Colombia, Italy, Moldova, and South Africa.

And she said "Eni" It will acquire activities "UFJ" To market natural gas in Spain, which strengthens its presence in the European gas market.

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The Italian “Eni” and the Spanish “Naturgy” announced on Thursday that they have reached an agreement with Egypt to settle a series of disputes over the factory, paving the way for the facility to resume work by next June.

The agreement would end the commercial interests of “Naturgy” in Egypt, and would break a joint project between “Naturgy” and “Eni”, while the latter and the Egyptian state-owned companies would raise their holdings in Damietta factory.

The facility, which has a capacity of 7.56 billion cubic meters annually, has been suspended since the end of 2012, when gas supplies in Egypt were affected by successive fluctuations, and the government was forced to import gas to meet local demand.

But recent discoveries mean that Cairo now has a surplus of gas, which it can export via LNG plants.

Last year, Egypt exported more than 3 million tons of LNG, up from 1.5 million tons in 2018 and 850,000 tons in 2017.

The Damietta plant is 80 percent owned by Union Venosa Gas (UFG), a joint venture between ENI and Naturgy, while the rest is divided equally between the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian General Petroleum Corporation.

Under Thursday’s agreement, the plant is currently 50 percent owned by ENI, 40 percent by EGAS and 10 percent by the Egyptian General Petroleum Corporation.

Eni discovered the “Dhahr” gas field, the largest field ever in Egypt, in 2015, and it owns a group of other assets in the Mediterranean.

The company will acquire a natural gas purchase contract for the Damietta plant and obtain equivalent LPG rights, which raises its LNG portfolio by 3.78 billion cubic meters annually.

Eni, like other major global oil and gas companies, is looking to strip its business of carbon and sees LNG and gas as important suppliers in that transformation.

Meanwhile, Naturgy praised the agreement as a positive step in its plan to reduce its exposure to gas purchase contracts, knowing that LNG prices are at their lowest levels in several years.

The Spanish company will also receive $ 600 million in cash, and most of the $ 300 million of UFG assets outside Egypt, excluding the company’s activities in Spain.

Since changes were made to management in 2018, Naturji has focused on cutting costs and leaving countries including Colombia, Italy, Moldova and South Africa.

Eni said it would acquire UFG’s natural gas marketing activities in Spain, which would boost its presence in the European gas market.

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