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The World Bank supports Egypt’s efforts to be a regional oil and gas trading hub, as several new gas projects started up recently in the Mediterranean country, the Egyptian Ministry of Petroleum said on Monday.
World Bank Executive Director Merza Hasan is visiting Egypt and holding talks with Egypt’s Petroleum Minister Tarek El-Molla on cooperation between the World Bank and the oil and gas sector in Egypt.
The officials discussed oil and gas projects to which the World Bank is contributing and talked about boosting cooperation with the bank for new investment opportunities, Egyptian media report, quoting a statement by the petroleum ministry.
Following the start-up of the giant gas field Zohr, Egypt has become an important player in the Mediterranean. Zohr, discovered by Eni in 2015, plays a key role in helping Egypt to avoid the need to import liquefied natural gas (LNG), according to the Italian oil and gas major.
Last month, Egypt issued what is likely to be its last LNG import tender, and could begin exports early in 2019, El-Molla told Bloomberg. The June tender was for Egypt’s third-quarter gas needs, and it might not need to import LNG for the fourth quarter and onwards, the minister said.
“I don’t think there will be more tenders beyond this, I think this is it,” El-Molla told Bloomberg. “Local production should cover our needs.”
Related: How Important Are Egypt’s Gas Discoveries?
Thanks to recent field start-ups, Egypt is ready to become a key exporter of oil and gas in the region and beyond, Ahmed Heikal, chairman and founder of investment firm Qalaa Holdings, told CNBC in April.
“Gas discoveries and infrastructure, as far as the LNG (liquefied natural gas) terminals in Idku and Damietta, those two have meant that Egypt is ready to perform a very important role as a hub for energy, especially gas exports,” Heikal said.
In April, Egypt’s minister El-Molla said that his country was aiming to attract around US$10 billion in oil and gas investments in the 2018/2019 fiscal year that begins in July.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
If the estimate of 90 trillion cubic feet (tcf) of proven reserves of natural gas in the newly-discovered offshore Noor gasfield in Egypt’s free economic zone waters are proven, then the proven reserves of Egypt’s natural gas will jump overnight from the current 62.8 tcf to 152.8 tcf. The Italian oil & gas giant ENI is about to announce this massive discovery.
Not only Egypt will have enough natural gas reserves to meet domestic demand for years to come but also to re-emerge as an exporter of both piped natural gas and LNG.
The giant Noor and Zohr gasfields, the biggest discovered in the eastern Mediterranean both by ENI, will be transforming Egypt from an importer of gas during the last few years to a key exporter of piped gas and eventually LNG to the Middle East and Asia-Pacific regions respectively.
As an an international gas trading hub, Egypt will also earn a royalty from converting Cypriot, Israeli and eventually Lebanese and Syrian natural gas into LNG and have it re-exported along with its own LNG either to Europe or most probably to the Asia-Pacific region where the demand for LNG is growing by leaps and bounds.
Moreover, the royalties from Egypt’s natural gas riches would provide a boon to the country’s budget thus brightening the growth prospects of the Egyptian economy.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London