FILE – Natural Gas
CAIRO – 18 February 2019: After six years, Damietta liquefaction will resume its work in April and export around 550 million cubic feet per day of natural gas, a Petroleum Ministry source told the local newspaper.
This decision came after the Egyptian government signed an agreement with the foreign partners of the project, as the plant is a joint venture between Union Fenosa Gas and the Italian Company Eni.
In January, it was reported that the government was about to sign an agreement with the main partner of the plant, the Spanish Union Fenosa, to drop a $2 billion arbitration claim lodged after gas to the facility was cut off in 2012.
The source stated that the Ministry of Petroleum agreed with the partners to compensate the company for its loss through the stoppage period with profits derived from the Egyptian Natural Gas Holding Company (Egas)'s 10 percent ownership of the facility.
The ownership of the Damietta Liquefaction plant is 26 percent for Italy's ENI, 26 percent for Union Fenosa and Spanish Egyptian Gas Co. (Segas) and 48 percent for the Egyptian government.
The source added that the ministry agreed to allow the Damietta plant to export quantities of natural gas produced locally, until the arrival of gas from the fields of Cyprus and Israel in the Mediterranean Sea, thus achieving an economic return in Egypt and ending the arbitration disputes.
Negotiations with foreign partners in the Damietta Dam plant were conferred with gas prices and charges of the use of the national gas network in exchange for the gradual re-operation of the plant and the export of locally produced natural gas.
Also, Eni is now waiting for approval from the Petroleum Ministry to connect the Damietta plant to the Zohr gas treatment plant.
Union Fenosa filed a lawsuit against Egypt at International Centre for Settlement of Investment Disputes (ICSID) in 2014 to compensate it with $8 billion after the Ministry of Petroleum stopped supplying liquefied gas to Damietta plant due to lack of energy resources inside the country following the January 2011 revolution.
With gas production amounting to around 6.4 billion cubic feet per day, Egypt achieved self-sufficiency of gas by the end of September 2018, aiming to become a regional hub of energy.