Country aims to quit importing LNG by year-end: El-Molla.
‘I want 10 Zohrs,’ Egypt’s president says about giant field.
Egypt is working with Eni SpA, operator of the giant Zohr gas field, to fast-track output and end the country’s need to import liquefied natural gas as early as this year, Oil Minister Tarek el-Molla said.
Zohr, the largest undersea gas discovery in the Mediterranean, will pump 1.7 billion cubic feet per day before the end of 2018, el-Molla said in a televised ceremony to inaugurate the field. Egypt is talking with Rome-based Eni to increase output to reach the 2019 production target this year instead, he said.
“God willing, by the end of the year when we reach the second phase of production, we can stop importing LNG,” el-Molla said Wednesday.
Zohr’s reserves — estimated at about 30 trillion cubic feet — may offer a permanent solution to the power shortages of the most populous Arab nation. The field’s output will also help ease pressure on Egypt’s economy, which has struggled with a shortage of foreign currency since a 2011 uprising. Egypt now imports liquefied natural gas, or LNG, at a high cost to meet its energy needs, and Zohr’s production could put an end to the tenders that suppliers from Glencore Plc to Trafigura PTE Ltd. have won in past years.
“The 350 billion cubic feet that we’re now producing can save us from buying three cargoes of LNG, which means we can save $60 million per month — about $720 million a year,” el-Molla said. “By the end of 2018, when the country reaches self-sufficiency, it will be able to save $250 million a month.”
Zohr, which Eni discovered in August 2015, has had a target of pumping 2.7 billion cubic feet per day by the end of 2019. Russia’s state-owned producer Rosneft PJSC closed a deal in October to acquire 30 percent of the field, and BP Plc bought a 10 percent stake last year.
Zohr’s output is not only moving Egypt closer toward achieving energy self-sufficiency. It might also restore the nation as a gas supplier for the eastern Mediterranean region.
“I want 10 Zohrs,” Egypt’s President Abdel-Fattah El-Sisi said at the televised ceremony, prompting laughter from other officials.
Source: Bloomberg Markets