Wednesday 15 January 2020
Books – Ahmed El-Sayed:
As part of efforts to transform Egypt into a regional energy hub, the Ministry of Petroleum announced today, Wednesday, the start of receiving Israeli natural gas in preparation for its liquefaction through liquefaction stations in Egypt, and then re-export it again.
This is the first time in the history of the two countries that Israeli gas has been received in Egypt after Egypt exported it to Tel Aviv.
As Egypt begins this step, it is awaiting a second step in the framework of converting to a regional energy center, by importing gas from the Cypriot “Aphrodite” field, to be liquidated and also re-exported.
The import of natural gas from Israel comes after an agreement signed by Israeli and Egyptian companies to import gas from the Israeli “Leviathan and Tamar” fields of gas at about $ 20 billion.
The joint statement of the Egyptian and Israeli Petroleum Ministries stated that this development will enable Israel to transfer quantities of its natural gas to Europe through the Egyptian LNG factories, within the framework of Egypt’s growing role as a regional gas center.
The statement stated that this step represents an important development that serves the economic interests of the two countries, as this enables Israel to transfer quantities of its natural gas to Europe through the Egyptian LNG factories, within the framework of Egypt’s growing role as a regional gas center.
According to sources in the oil sector, it is planned to gradually bring the amount of imported gas to nearly 7 billion cubic meters by 2022.
Both ministers, Tariq Al-Mulla and Steins, will announce this development during the Ministerial Conference of the Eastern Mediterranean Gas Forum, which will be held next Thursday in Cairo, according to the statement.
It is expected that the energy ministers of Egypt, Cyprus, Israel, Greece, Italy, Jordan and Palestine will agree to establish a regional gas organization during the summit.
Egypt is scheduled to receive gas from Israel via the East Mediterranean pipeline, which was previously used to export Egyptian gas to Israel, which has been out of operation since 2012, after the export agreement was canceled.
The line, which was bombed several times after the January revolution, was repaired by militants in the Sinai, and adjustments were made to enable it to be used to export gas from Israel to Egypt.
According to the agreement concluded by the gas companies operating in Israel, with the Egyptian private company “Dolphinus”, the companies will supply about 85.3 billion cubic meters of natural gas to Egypt over a period of 15 years, at a value of about 20 billion dollars.
This amount is about 35% higher than what was agreed in 2018 upon the first announcement of the deal.
Egypt aims to become an energy center in the coming years and thus focuses on supporting the infrastructure of the Egyptian networks that can help it achieve this goal.
Egypt has two liquefaction stations in Edko and Damietta, a feature that is not available in the eastern Mediterranean countries that seek to export gas discovered in its coasts, because natural gas needs to be transferred to a liquid to be loaded onto ships and exported.
These units have stopped working in recent years, due to the lack of domestic production of gas, and Egypt has turned into a net importer for it, in order to bridge the deficit between production and consumption.
But with the great discoveries that have been made to Egypt in the Mediterranean, Egypt hopes to restart these stations in order to export quantities of its own gas, or gas discovered in neighboring countries such as Israel and Cyprus.
As part of the transformation plan for a regional energy center, Egypt signed in September 2018 an agreement to establish a direct marine pipeline project.
According to the agreement, natural gas will be transported from the Cyprus “Aphrodite” field to liquefaction stations in Egypt, and re-export to various markets.
After importing Israeli and Cypriot gas, Egypt hopes to turn into a regional center for gas export to the world, taking advantage of the comparative advantage it possesses, and not other Eastern Mediterranean countries, which are gas liquefaction units, as well as its distinctive geographical location.