Thursday , March 4 2021

Will Egypt become a regional energy hub?



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When self-supply of natural gas is achieved, Egypt is trying to transform it into a regional energy hub based on its existing infrastructure, allowing gas imports from Cyprus and Israel to be re-exported to Europe.

"The Egyptian plan to become a regional energy center is not limited to the natural gas sector, it also includes large projects in the oil and petrochemical sector," said former Oil Minister Osama Kamal.

"The petrochemical industry will play an important role in the Egyptian energy sector in the coming years," Kamal said, still close to the decision-making circle.

Egyptian Oil Minister Tariq al-Mulla said that Egypt "stopped importing LNG" in September after "achieving self-sufficiency".

"Within a year, four main Egyptian gas fields in the Mediterranean were set up on the production map: the areas of Africa, Atol, Northeast and Northern Alexandria," he said.

He added that "the total production rate was 6.5 billion cubic meters of gas per day", which is equal to domestic consumption.

– the private sector imports gas –
But the Egyptian government does not want to achieve self-sufficiency, but wants to take advantage of two large gas liquefaction plants located in Damietta and Adco in the Mediterranean Sea.

Two plants operate less than their capacity since 2015 due to the need for a domestic market for all quantities of gas produced in Egypt after the excess was allowed to liquefy a part of production and exports.

Therefore, the Egyptian government has decided to open the doors to the private sector for gas imports through liquefaction pipelines in Damietta and ADCO and then re-export.

In this regard, agreements on gas imports from Israel and Cyprus have been concluded.

In February, an agreement was signed on the transfer of natural gas for the transfer of natural gas from Israel's Tamar and Levitan fields to Egypt starting in 2019 after a ten-year agreement worth $ 15 billion.

The US-Israel Consortium, which led the development of Israeli oil gas land on September 27, announced an agreement to allow the transfer of gas from the two Israeli fields to Egypt by restoring the pipeline that Cairo had exported to the country of Israeli state after technical changes . It works in the opposite direction.

According to the contract, Noble Energy and its Israeli partner Delek together with the Egyptian East Gas Company bought 39 percent of the gas pipeline connecting Israel's Ashkelon city to northern Sinai.

"East Gas Company, the largest gas import and reseller of Israel, most of its shares are owned by the Egyptian General Intelligence Service, which owns 80 percent of its profits," Mada said.

Osama Kamel told AFP that the Egyptian intelligence service "has been a major role in East Gas Company since its inception in 2003".

"He sees no problem, but on the contrary, this guarantees the protection of Egyptian interests."

– "billions of oil" –
In the oil sector, the development of infrastructure is expected to provide the government with billions of dollars, particularly with the start of the new mustard refineries in Shubri Al-Khaimah in North Cairo next year and the development of the Midor plant to increase its production capacity.

"Commercial production of the plant, which will produce 4.4 million tons of petroleum products a year, will begin no later than the end of May," Ahmed Heikal, president of Citadel Capital, told Most Press. "This production will provide the country with imported fuel Worth is 2 billion dollars a year.

He emphasized that his company began to study this project since 2004, "because we were very scared of the quantity of imported petroleum products imported by Egypt and its impact on the budget deficit and the trade balance".

The oil minister recently announced the signing of an agreement extending the Midorsk Refinery, which will increase its production capacity by 60%.

Tariq Al-Mulla said that the development "would increase production volumes from potash, high-tech, reactive fuel, diesel, coal and sulfur from 4.6 million tonnes at present to 7.6 million tonnes." This is in line with the national project of the State of Egypt Regional Trading and Trade in Oil and Gas. "

According to the minister, this development will enable "the production of high quality products in accordance with international standards, which will contribute to ensuring the liquidity of the dollar as a result of the export of certain products to international standards."

Egypt's imports of oil and petroleum products in 2017 amounted to approximately $ 5.2 billion.

Egypt also wants a great breakthrough in the petrochemical industry.

The Al-Tahrir Petrochemicals complex at Ainu Sukhna is currently being built on the Red Sea, about 120 kilometers east of Cairo.

The complex will produce 4 million tons of petrochemical products worth $ 6 billion a year and will allow Egypt to become a petrochemical exporter.

The project will also enable the creation of 3,000 jobs.


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