Wednesday, July 26, 2017 - 12:18pm
Egypt is the third largest natural gas producer in Africa and holds about 65 Tcf of proved natural gas reserves, according to the BP Statistical Review of World Energy 2017. But due to Egypt’s government paying low gas prices to foreign operators, it was getting more difficult to attract investments on developing new gas projects. Therefore, natural gas production had been under rapid decline from 5.9 Bcf/d in 2011 to 4.1 Bcf/d in 2016.
With significant natural gas reserves in the country, Egypt still needs to import natural gas from neighboring countries to satisfy domestic consumption, so Egypt’s government has agreed to pay a higher price to the foreign operators and encourage them to develop new natural gas discoveries, especially fields in the deepwater Mediterranean Sea and Nile Delta.
With new-source projects being brought on stream in the next couple of years, the Ministry of Petroleum in Egypt is expecting to double the country’s gas production by 2020. Will they reach this goal? Stratas Advisors put together a country production outlook to test the outcome.
New Gas Projects
There are several major gas projects in the pipeline that will be the main drivers for production growth in the next five years.
In April 2017 the West Nile Delta Phase One project, which is operated by BP, began producing in the Taurus and Libra fields. The West Nile Delta Phase Two project, involving development of the Giza, Fayoum and Raven fields, is scheduled to come online in 2019. Total recoverable reserves of the West Nile Delta Project is about 5 Tcf.
The Zohr Field, discovered by ENI in 2015, is the largest natural gas field so far discovered in the Egyptian Mediterranean Sea region. Zohr holds approximately 30 Tcf of natural gas resources. Operator ENI started Zohr’s fast track development in 2016. The development is now on track to start production by the end of 2017 and reach a plateau of 2.6 Bcf/d in 2019.
On the East Nile Delta, the Atoll Field operated by BP is estimated to contain 1.5 Tcf natural gas recoverable reserves. The field was discovered by BP in 2015. The Atoll project will be developed in two phases: Atoll phase one is expected to start first production in 2018, followed by phase two, which is still in the conceptual stage and scheduled to come online in 2020.