* For other news from Reuters Middle East Investment Summit, click here * Hopes Zohr to begin production earlier than announced * Foreign oil, gas investment to increase by $1 bln this year * Plans third LNG floating storage and regasification unit * Expects to stop importing LNG by 2020
By Ehab Farouk
CAIRO, Nov 2 (Reuters) - Egypt aims to start natural gas production from its massive offshore Zohr field in 2017, a year ahead of schedule, oil minister Tarek El Molla said.
The Zohr gas field, discovered by Italy's Eni, is the biggest in the Mediterranean, and with an estimated 30 trillion cubic feet of gas it is expected to plug Egypt's acute energy shortages and save it billions of dollars in precious hard currency that would otherwise be spent on imports.
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Building on Egypt’s hydrocarbon push, BP has announced its intent to begin output in early 2017 at its Alexandria concession, putting it ahead of schedule, offering some momentum to the country’s wide-ranging energy push.
According to media reports, the British company announced that the offshore concession will produce about 450 million cubic feet per day when it begins to produce in 2017, reaching 1.2 billion cubic feet per day by the end of 2019.
The BP news comes on the heels of a burst of positive energy news for Egypt after several years of industry struggles. In recent years, Egypt has faced substantial challenges to meeting its energy needs as political and financial instability have threatened local production and made it difficult to afford costly imports without accruing large foreign debts. While small discoveries have provided Cairo with some momentum towards attracting the interest and investment necessary to move towards its energy goals, significant discoveries have allowed a burst of confidence about the country’s energy environment and ability to overcome any doubt among potential investors.
Chief among these was the discovery of a “super giant” field by Eni earlier this year that could be home to up to 30 trillion cubic feet of natural gas, making it the biggest field in the Mediterranean, according to a Bloomberg report. The discovery spurred ENI CEO Claudio Descalzi to suggest its development could transform Egypt in the years ahead. According to a Bloomberg report, the successful development of the field could help Cairo meet its domestic demand first before considering entering the export market.
In addition to addressing the country’s domestic demand, the discoveries have boosted the country’s chance of establishing itself as a leading energy player in the Eastern Mediterranean region. If successful, the discoveries could put Egypt on par with Israel and Cyprus, who have made the most progress in recent years towards developing a new-found access to offshore discoveries in the region.
