The Italian energy group Eni pledged to ease the energy crisis in Europe by providing an additional 14 trillion cubic feet of gas to global markets.
“We are increasing our gas production and will send everything we have discovered to Italy and southern Europe,” said Eni CEO Claudio Descalzi.
This comes by “taking advantage of existing alliances with producing countries”, including Egypt, where the Italian company will work with Egypt and other countries to provide alternative sources of gas to Europe, at a time when European countries plan to phase out dependence on Russian energy sources. following its invasion of Ukraine.
Europe is facing one of the biggest energy supply shocks ever. And while the energy sector has escaped direct Western sanctions so far, the uncertainty regarding the war has pushed up oil prices. Investment bank Goldman Sachs recently raised its forecast for the immediate execution price for 2022 to $ 135 a barrel, while the Norwegian consulting company Rystad Energy believes that the price has reached an unprecedented level at $ 200 a barrel.
Eni in Egypt
The company is intensifying work on “gas condensation projects” in Egypt, Congo, Angola, Indonesia, Nigeria and Mozambique, and Eni expects its LNG production to exceed 15 million tons annually.
The company has been particularly active in Egypt recently, where Eni obtained gas exploration concessions as part of the government tender for the year 2021, and the Italian group allocated at least one billion dollars for oil production in the Gulf of Suez and the Nile Delta.
The importance of Egyptian gas exports has increased in recent months, amid an energy crisis that Europe has not experienced before. Egypt is one of the countries that Europe looks to to help reduce dependence on Russian gas.
Recently, Egyptian Petroleum Minister Tarek El Molla indicated in press statements the possibility of exporting more liquefied natural gas due to the rise in energy prices in all fields once morest the backdrop of the Russian-Ukrainian war.
Egypt’s gas exports to Europe
Al-Mulla recently discussed the efforts of the countries of the Eastern Mediterranean Gas Forum to secure some gas supplies to global markets with officials from the United States and Britain during the CERAWIC International Energy Conference last week.
Egyptian gas exports to Europe exceeded two million metric tons in 2021, up from only 270,000 the previous year, according to Standard & Poor’s Global Platts, citing shipping data analysis company Kepler.
Meanwhile, the Egyptian Minister of Petroleum, Tarek El-Molla, said, in early December, that Egypt exports natural gas at its full capacity, which amounts to regarding 1.6 billion cubic feet per day, from two gas liquefaction stations, as it seeks to benefit from the rise in international prices.
Al-Mulla indicated that exports are expected to decline to one billion cubic feet per day in next April, due to the usual seasonal fluctuations, with the increase in domestic consumption with the advent of summer.
The minister added that Egyptian natural gas production is stable and currently ranges between 6.5 and 7 billion cubic feet per day
Al-Mulla said in separate statements during the East Mediterranean Gas Forum, “Egyptian gas has played a role in securing Europe’s energy needs. The liquefaction units are operating at full capacity now, as we seek to maximize our natural gas exports in light of the rise in international gas prices.”
Nikos Tsavos, senior fellow at the Center for Strategic and International Studies, said recently that increasing Egyptian exports to Europe would be “short-term.” “Egypt needs constant investment and imports to maintain exports. Even then, the current capacity is probably the maximum we can expect from Egypt,” he told S&P Global.
Earlier this month, Israel began exporting gas to Egypt through the Arab Gas Pipeline, through which Egypt is expected to receive 2.5-3 billion cubic meters of gas this year.
Prior to that, Israel shipped gas only through the East Mediterranean Gas Pipeline that runs between Ashkelon and El Arish, which has an annual annual capacity of 7 billion cubic metres.
In the long term, Egypt will be able to significantly increase its exports to Europe through its planned pipeline with Greece, although it is unlikely to be operational any time soon. The project is still in its early stages, with the two countries holding preliminary talks late last year.
Egyptian gas exports
Egypt achieved a record in LNG exports, placing Egypt at the forefront of the ranking of Arab countries that achieved the largest growth in the volume of natural gas exports during the third quarter of 2021, with the export of regarding one million tons, an increase of regarding 900% compared to the third quarter of 2020.
Cairo succeeded in restarting the gas liquefaction plant in Damietta and resuming the export of liquefied natural gas from it following an 8-year hiatus.
