Zohr gas output slumps in 2022: Gas output from Eni’s giant Zohr gas field dropped 11% y-o-y to 2.5 bn cfd in 2022, Mees reports. The diminished output from the Italian firm’s flagship field, which is 6% below the output cap set on the field in 2021 and 23% short of the field’s total production capacity, likely comes on the back of water breakthrough difficulties, according to Mees.

The slump has exacted a toll on our total gas production, which dipped to a 28-month low of 6.1 bn cfd in February, down 7% y-o-y, according to figures published by Mees earlier this month. Zohr, the Mediterranean’s largest gas field, accounts for some 38% of the country’s gas output. The discovery of the field in 2018 allowed us to pull the plug on gas imports and turned the country into a net natural gas exporter.

But LNG exports remain stable thanks to imports of Israeli gas: Despite the Zohr rout, Egypt’s LNG exports were up 6% y-o-y to 1.9 mn tons in 1Q 2023, buoyed by imports from Israel, according to Kpler data cited by Mees. Israel’s gas deliveries to Egypt surged 49% to a record 606 mn cf/d in 2022.

Remember: Egypt and Israel signed a landmark gas export agreement in June to ramp up exports to the EU as the continent looks to phase out reliance on Russian fossil fuels. The agreement allows Israel to send more gas to Egypt’s LNG facilities for export to Europe.

Gas is a key source of hard currency for Egypt: The government has sought to maximize gas proceeds to alleviate the FX crunch triggered by the war in Ukraine, and last year began rationing domestic consumption in order to increase exports.

Eni is a key partner for Egypt, producing 60% of its gas and owning a 50% stake in its Damietta LNG plant, one of the country’s two export terminals. Egypt is a major market for Eni, contributing a third of its total gas production during the quarter.

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