East Mediterranean Gas Organization: A Partnership To Stand

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Sat, 14 Nov 2020 - 04:04 GMT

FILE - Egypt's Zohr gas field in the Mediterranean

FILE - Egypt's Zohr gas field in the Mediterranean

CAIRO - 14 November 2020: The seven member states of the East Mediterranean Gas Forum officially turned the alliance into a regional organization headquartered in Cairo. The charter was signed by Egypt's Minister of Petroleum, Mining, and Mineral Resources Tarek al-Molla and Cypriot, Greek, Israeli, Italian, Jordanian, and Palestinian counterparts in the headquarters of Egypt's Petrojet company. The forum was launched in January 2019, and is aimed for reinforcing cooperation among member states. The following is an overview of partnerships among member states in the oil and gas sector.

 

Egypt and Cyprus

 

Egypt and Cyprus plan to build a gas pipeline extending from the Cypriot gas field, Aphrodite, to Cairo, according to an agreement they both signed in 2018. The gas from the Cypriot field will be liquefied at Idku and Damietta facilities, and then, exported to European countries. The field will start production in 2026. The initial phase will consist of five wells whose output will be 800 million cubic feet per day.

 

It is noteworthy to mention that Egypt is the region's only country having gas liquefaction plants. Currently, the majority of liquefaction processes are taking place in Edco Liquefaction Factory run by Egyptian LNG, a joint venture between the state-owned Egyptian General Petroleum Corporation (EGPC), Egyptian Natural Gas Holding Co. (EGAS), Royal Dutch Shell, Petronas, and Engie. The factory has an annual capacity of 7.2 million tons.

 

The other one located in Damietta is co-owned by the Spanish Union Fenosa. That has an annual capacity of up to five million tons and can store 130,000 tons of liquefied natural gas. It has been out of service since February 2013 when the government suspended gas export to meet local needs.

 

Egypt and Italy  

 

Eni has been operating in Egypt since 1954. In 2019, it produced 27 million barrels of oil, and 551 billion of standard cubic feet of gas. The company's production activities are taking place in the Shorouk block (Eni 50%), Abu Rudeis fields (Eni 100%), the Western Desert in the Meleiha (Eni 76%), South West Meleiha (Eni 100%) concessions, Ras Qattara (Eni 75%), West Abu Gharadig concessions (Eni 45%), the Ashrafi (Eni 50%), Baltim (Eni 50%), Nile Delta (Eni 75%), North Port Said (Eni 100%), North Razzak (Eni 100%), Temsah concessions (Eni 50%), Ras el Barr (Eni 50%), and South Ghara concessions (Eni 25%).

 

As for exploration activities, Eni drilled in 2020 an exploration well in a prospect called Bashrush, which is located in Egyptian waters of the Nile Delta. It also made a new gas discovery in Great Nooros Area and drilled an exploratory well dubbed Nidoco NW-1.  

Egypt and Jordan

 

The Arab Gas Pipeline was launched in 2001 to deliver natural gas from Egypt to Jordan, Syria, and Lebanon. The pipeline extends over 1,200 kilometers, and was built at a cost worth $1.2 billion. In 2019, Egypt's Edco Liquefaction Factory exported to Jordan through the Arab Gas Pipeline 3.64 billion cubic meters over 50 shipments.

 

FILE - Section of the Arab Gas Pipeline located in North Sinai

FILE - Section of Arab Gas Pipeline located in North Sinai's Arish 

 

Egypt and Israel

 

In 2018, Egypt's Dolphinus Holdings, Noble Energy, and Israel's Delek Drilling signed an agreement for Egypt to import from Israel 85.3 billion cubic meters of gas worth $19.5 billion over 15 years so it would be liquefied and exported to Europe.

 

The gas is extracted from the Israeli Leviathan (60 billion cubic meters) and Tamar (25 billion cubic meters) fields in which the latter two are partners. It is transported through a gas pipeline connecting the port of Ashkelon to Al-Arish.

 

Cyprus, Greece and Israel

 

The three countries early in 2020 a deal to build a pipeline stretching over 1,900 kilometers to carry 10 billion cubic meters of gas per year from "Israeli and Cypriot waters to the Greek island of Crete, on to the Greek mainland and into Europe’s gas network via Italy," according to Reuters. The project dubbed EastMed is worth $6-7 billion and will be completed by 2025, if the three states reach a final investment decision (FID) by 2022. Nevertheless, given the recession ensued from the COVID-19 pandemic, all FIDs around the globe are likely to be postponed, according to a Reuters energy report issued in August.

 

Israel and Jordan

 

In January, Israel began exporting gas to Jordan in accordance to a $10-billion deal signed in 2016. Jordan will receive 45 billion cubic meters over 15 years. The amount per annum will be 3-3.5 billion cubic meters.

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