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Egypt a success story

Feb 12, 2019
4 min read
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Pipeline Magazine’s Julian Walker spoke exclusively to Massimo Mantovani, Chief Gas & LNG Marketing and Power Officer, Eni about the positive outlook for gas and LNG in Egypt

Last year, Eni began producing from the Zohr field, the largest gas discovery ever made in Egypt and in the Mediterranean Sea. How important is the Egyptian market to Eni’s gas and power growth strategy?

Egypt is today one of the largest domestic gas markets in Africa (in excess of 60 bcm per year, comparable in size to one of the big European countries). Over the past few years, gas consumption has been constantly moving upwards in all segments, including power generation. This has encouraged new upstream exploration and developments especially for Eni. The existence of such important domestic gas and power market, together with the existing liquefaction facilities which allows the gas to be exported as LNG, are key for attracting new investments and Eni is historically one of the biggest investors in Egypt. The decision to invest and develop new giant gas fields like Zohr can only benefit from the existence of such an important market.

Will North Africa and the Mediterranean become a key gas hub?

All countries around the Mediterranean Sea and especially the North African countries should adopt policies to further encourage upstream exploration and developments, as well as the adoption of reforms able to guarantee a balanced and sustainable internal gas market. On these bases, clearly North Africa has a future as a key gas hub given its vicinity to an important market such as the European gas market. More specifically, Egypt can become a success story, being able to combine strong growth in production with growth in domestic market as well as in the utilisation of gas export facilities (Damietta and Idku), which grant a constant connection between internal and international prices.

In your opinion, when will Egypt fully become independent from LNG imports?

As of today Egypt is already independent from LNG imports thanks to the latest discoveries and developments. How long the recently achieved gas demand/supply balance can be maintained will very much depend on the country’s definition and adoption of new reforms capable of guaranteeing it, not least of which the reduction of state subsidies and the increase in power generation efficiency.   

Which markets will Egypt target and what developments does Egypt need to become a key player in the LNG industry?

All the right ingredients are there, facilities for LNG export like Damietta that should be put in service as soon as possible, together with gas supply from the latest giant developments like Zohr and future gas from new exploration. Egypt needs to target all premium international markets, starting with Europe, which has the economic advantage of proximity and allows the minimisation of transport costs.

What is your outlook for the gas and LNG market in North Africa and the Mediterranean?

We are very positive about the growth of natural gas demand worldwide. Natural gas has huge advantages in terms of availability and affordability and its environmental impact is very limited in comparison with other fossil fuels such as coal or oil. The Mediterranean area is no exception and we foresee a significant potential for growth. However, the situation of each country is very specific. Ultimately, the development of natural gas production and consumption will depend on appropriate policies put in place by the individual governments. As I mentioned, we see what has been happening in Egypt over the last few years as a success story from this point of view.  

In your opinion, how important is EGYPS in acting as a showcase for promoting global industry cooperation?

It is fundamental to have a recurring high level forum in which all involved institutions, partners and stakeholders can discuss the respective strategy in each specific area as well as identify business opportunities to develop the gas market.

 

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