{"id":544748,"date":"2022-03-20T04:00:27","date_gmt":"2022-03-20T04:00:27","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/03\/20\/will-italian-oil-giant-eni-help-boost-egyptian-lng-exports-to-europe\/"},"modified":"2022-03-20T04:00:27","modified_gmt":"2022-03-20T04:00:27","slug":"will-italian-oil-giant-eni-help-boost-egyptian-lng-exports-to-europe","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/03\/20\/will-italian-oil-giant-eni-help-boost-egyptian-lng-exports-to-europe\/","title":{"rendered":"Will Italian oil giant Eni help boost Egyptian LNG exports to Europe?"},"content":{"rendered":"

<\/a> Eni to work with Egypt + others to find alternative gas for Europe:<\/strong> Eni pledged to bring more than 14 trn cubic feet of additional gas to the global market and mitigate Europe\u2019s energy crisis by \u201cleveraging established alliances with producing countries,\u201d including Egypt, the Italian energy giant announced in a press release (pdf)<\/a> outlining its 2022-2025 strategy. This comes as European countries plan to phase out dependency<\/a> on Russian energy sources after its invasion of Ukraine.<\/p>\n

The company\u2019s liquefied natural gas (LNG) volumes are expected to \u201cexceed 15 mn tonnes per year\u201d<\/strong> as the company ramps up gas developments in Egypt, Congo, Angola, Indonesia, Nigeria and Mozambique. \u201cWe are increasing our gas production and will send to Italy and southern Europe all the gas we have found,\u201d CEO Claudio Descalzi said in a webcast (watch, runtime: 1:22:30<\/a>).<\/p>\n

Eni has been especially active in Egypt lately: <\/strong>It was awarded gas exploration blocks in the 2021 bid round<\/a> and has committed to spend at least USD 1 bn<\/a> on oil exploration and production in the Gulf of Suez and Nile Delta. The company is also expected to announce more agreements with Egypt, with a number of joint initiatives<\/a> on carbon capture, utilization and storage (CCUS), lined up ahead of the upcoming COP27 global climate summit in Sharm El Sheikh next year.<\/p>\n

Egyptian gas exports have taken on a new level of importance in recent months<\/strong>, amid Europe\u2019s ongoing energy crisis. Egypt is one of the countries that Europe is looking to<\/a> to help solve its gas shortfall as it decreases its reliance on Russian supplies, and Oil Minister Tarek El Molla has pointed to<\/a> the possibility of us exporting more LNG given elevated energy prices across the board on the back of the war.<\/p>\n

Egyptian gas is usually snapped up by Asian buyers, but has increasingly been sent to <\/strong>Europe:<\/strong> Egyptian gas exports to Europe topped 2 mn metric tons in 2021, up from just 270k the year before, according to Kpler shipping data cited by S&P Global Platts<\/a>.<\/p>\n

It<\/strong>\u2019s unclear if Egypt has the capacity for more:<\/strong> El Molla said in December<\/a> that the country\u2019s LNG terminals were running at maximum capacity, and it is unclear how Egypt could further boost export volumes to Europe. Nikos Tsafos, a senior fellow at the Center for Strategic and International Studies, recently said that the increase in Egyptian exports to Europe would be \u201cshort-lived.\u201d \u201cEgypt needs continuous investment and imports to sustain exports. Even then, the existing capacity is probably the maximum we can expect out of Egypt,\u201d he told S&P Global.<\/p>\n

Though ex<\/strong>tra Israeli gas should help us maintain current export volumes <\/strong>as domestic consumption ramps up in the summer months. Exports are expected to fall to 1 bn cubic feet per day<\/a> this summer from around 1.6 bcf\/d currently. Earlier this month, Israel began exporting gas to us via the Arab Gas Pipeline, a new route through which we\u2019re expected to receive 2.5-3 bn cubic meters of gas<\/a> this year. Prior to this, Israel shipped gas only via the Eastern Mediterranean Gas (EMG) pipeline that runs between Ashkelon and Arish, which has an approximate annual capacity of 7 bcm.<\/p>\n

In the lo<\/strong>ng-term: A <\/strong>planned pipeline<\/a><\/strong> between Egypt and Greece would enable us to <\/strong>significantly increase exports to Europe<\/strong>, though it\u2019s unlikely to be up and running any time soon. The project remains in its infancy, with the two countries holding initial talks late last year.<\/p>\n

REMINDER\u2013 Europe (and the rest of the world) is facing one of the largest energy shocks ever: <\/strong>While European sanctions on Russia have so far spared the vital energy sector<\/a>, uncertainty over the war has sent the price of oil soaring. Goldman Sachs raised its 2022 spot price forecast<\/a> recently to USD 135, while Norwegian consultancy Rystad Energy believes it could reach an unprecedented USD 200<\/a>.<\/p>\n

OTHER ENERGY NEWS-<\/strong><\/p>\n