News Analysis: Strategic location, improved infrastructure to turn Egypt into regional energy hub - XINHUA

2018-10-06 05:44:4
Marwa Yahya; Editor: Yang Yi

CAIRO, Oct. 5 (Xinhua) -- With Egypt's strategic location and improved infrastructure, the North African country is becoming a regional hub for energy trade, said experts.

"Egypt has all the conditions needed to turn into a regional hub for energy trade. It has a very unique location among the three continents, besides its Suez Canal and internationally standardized infrastructure," Salah Hafez, former deputy chairman of the General Authority for Oil, told Xinhua.

"Egypt also owns gas pipelines to Israel and Jordan, gas liquification stations in Damietta and Edko in northern Cairo, and sea ports," Hafez said.

The Egyptian government announced on several occasions a two-phase plan to turn Egypt into an energy hub. The first will be carried out by construction of electricity networks between Egypt and its neighboring countries.

The electricity connections with Libya and Jordan have been in operation, with other networks linking Egypt with Syria and Iraq still under construction.

By the end of 2018, the electricity links with Sudan will start working. Egypt also plans to establish a sea cable for electricity connection with Greece, Cyprus, and Saudi Arabia, the spokesman of the Electricity Ministry told Xinhua.

Israel-Egypt gas export deal shapes up - PETROLEUM ECONOMIST

5 October 2018

Gina Cohen

Practical steps have been taken that could eventually enable gas from Israel’s offshore to be piped to Egypt

Israel's Delek, the US-based firm Noble and Egypt's East Gas have established a company (Emed) to buy 39% of the 26in, 90km (56-mile) East Mediterranean Gas pipeline for $518m. This investment, combined with a transportation agreement, will provide the partners with the exclusive rights to use all the pipeline's capacity.

Of the $518m, the Leviathan and Tamar offshore gasfield partners will each pay $125m, whilst Delek and Noble will each pay another $60m. Most significantly, the East Gas company, which also owns the pipeline from Aqaba in Jordan to el-Arish in Egypt, will invest $148m, which is a considerable amount for Egypt. This strategic partnership with a leading Egyptian infrastructure owner provides "skin in the game" and an Egyptian umbrella for the entire transaction to sell Israeli gas to Egypt.

Leviathan gets first rights to transmit gas in the EMG pipeline. Namely, if capacity in the line is low, then the first 3.5bn cubic metres a year is for Leviathan and the second tranche of 3.5bn cm/y is for Tamar. If Tamar can't pipe all of this volume, the capacity automatically reverts to Leviathan.

This includes the ability to transmit additional Israeli gas in the 10bn-cm/y East Gas-owned pipeline from Aqaba to el-Arish.

Defa publishes tender documents for LNG terminal - CYPRUS MAIL

OCTOBER 5, 2018

Cyprus’ natural gas public company (DEFA) on Friday published the tender documents for the design, construction, and operation of an LNG import terminal that will be located at Vassilikos.

“This is an important milestone for DEFA, and for the people of Cyprus, who will soon benefit from the cost savings and environmental benefits from the use of natural gas. We expect to issue a request for expressions of interest for the supply of LNG in the coming weeks and a full tender early in 2019,” DEFA chairman Symeon Kassianides said.

The tender documents can be obtained from the e-procurement portal of the Republic of Cyprus.

The €300m LNG Terminal will include a floating storage and regasification unit (FSRU), a jetty for mooring the FSRU, a jetty-borne gas pipeline and related infrastructure.

The LNG Terminal will be completed in 2020 and 40 per cent of its cost, or €101m, will be funded by the EU.

ENERGY: ExxonMobil to drill offshore Cyprus in Q4 as Turkey renews threats - FINANCIAL MIRROR

05 October, 2018

US energy giant ExxonMobil said on Friday it plans to begin test drilling for hydrocarbons offshore Cyprus later this year despite Turkey warning international firms against such moves.

“Our plan is to drill some time in the fourth quarter, we haven’t got an exact date right now,” senior vice chairman of ExxonMobil Neil Chapman told reporters Friday.

He made the comments after holding talks with Cypriot president Nicos Anastasiades a day after Turkey advised energy firms not to bid for a license to explore for oil and gas in a new block offshore Cyprus.

Cyprus on Wednesday invited France’s Total, Italy’s Eni and ExxonMobil - already licensed to exploit oil and gas in Cyprus’ Exclusive Economic Zone (EEZ) - to bid for unclaimed block 7.

Chapman said, “we have not looked in any detail at block 7 yet”.

Cabinet looking for gas licensees for Block 7 (Updated) - CYPRUS MAIL

October 3, 2018 

George Psyllides

The energy minister announced on Monday Cyprus will be seeking bidders for a €300m project to facilitate natural gas imports and will also invite energy companies to express interest in another offshore field inside the island’s exclusive economic zone.

Rising Oil Bill May Erase Egypt's Savings From Gas Milestone - BLOOMBERG

October 3, 2018, 4:22 PM GMT+3

• Egypt faces hit to budget from oil after ending imports of gas
• Government was planning to phase out costly fuel subsidies

No sooner has Egypt achieved its milestone of regaining self-sufficiency in natural gas than another corner of the energy market threatens to deal a new blow to fragile government finances.

A six-fold increase in production at the giant offshore Zohr field means Egypt can now meet its own needs domestically. The government may now save some $2 billion a year after receiving what it said was the final shipment of expensive liquefied natural gas last week. But relief for the most populous Arab country -- a net importer of refined gasoline and diesel -- could be short-lived.

Egypt’s 2018-2019 budget assumes oil prices at $67 a barrel but crude has already surged past $80, threatening plans to cut the deficit under an economic overhaul program backed by a $12 billion International Monetary Fund loan. It also poses a dilemma for the government, which had sought to phase out fuel subsidies by mid-2019; burden the population by lifting prices higher and faster than expected or abandon its deficit target altogether.

Wood celebrates new partnership with ENPPI in Egypt - WOOD

London, UK, 01 October 2018

The British Ambassador in Egypt Sir Geoffrey Adams and His Excellency Minister of Petroleum Eng. Tarek El Molla celebrated a new signed subsea agreement between Egyptian Petroleum Company ENPPI and British company Wood. Both companies have been working together for the past two years on the Burullus project, providing subsea engineering and operations support services through an ENPPI/Wood Consortium Agreement.

The new agreement was signed by ENPPI Chairman Eng. Alaa Hegazy and Wood Technical Director Engineering Colin McKinnon. Together, both companies will continue to draw on a huge pool of talent and experience globally to provide the best independent technical solution for oil and gas projects as well as enable and facilitate subsea technology transfer and training through projects and training courses.

British Ambassador to Egypt Sir Geoffrey Adams said: “Today we celebrate a new chapter in the Egyptian- British partnership which brings together Egyptian talent and British expertise. New partnerships are the stepping stones for shared knowledge and benefit, new job opportunities for all Egyptians and fast track delivery for mutual economic success.”

EMG, Israeli Electric are withdrawing arbitration cases against Egypt - ENTERPRISE

Monday, 1 October 2018

EMG, IEC have begun withdrawing arbitration cases against Egypt: East Mediterranean Gas (EMG) and Israel Electric Corporation have officially begun proceedings to drop their international arbitration case against state energy companies EGPC and EGAS, according to Oil Ministry sources. The two cases would have seen Egypt pay a combined USD 1.988 mn in fines for failing to supply IEC with gas in 2012.

Key step in our energy hub transformation: The withdrawal of the claims are conditions of the USD 518 mn agreement Noble Energy and Delek — the operators of Israel’s Leviathan and Tamar gas fields — and their Egyptian partner East Gas signed last week. The transaction gives Nobel and Delek a 39% stake in EMG, paving the way for the gas field operators to export natural gas to Egypt under a USD 15 bn agreement signed in February with Alaa Arafa’s Dolphinus Holdings.

Advisers: Shahid Law Firm acted as sell-side legal counsel on the EMG transaction, while Alliance Law Firm had was on the buy-side.

EMG Transaction - Enabling Gas Export to Egypt - DELEK DRILLING

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