Egypt set to expand the gas sector

Najla Moussa
5 Min Read

CAIRO: Seeking to reduce its dependency on Russia, Bulgaria may start importing gas from Egypt via Turkey, according to the ministry of investment.

The announcement was made after Bulgarian Economy and Energy Minister, Rumen Ovcharov, met with his Turkish counterpart, Hilmi Guler, according to the Egyptian ministry.

During the meeting, a number of key issues were brought to the table, such as both countries keenness to find alternative gas routes to Russia, whose control over the subterranean energy routes is less than desirable.

The two ministers also discussed the developments of the Nabucco gas pipeline project, which was developed by Austria’s gas and oil group, OMV, and is a joint venture between Botas (Turkey), Bulgargaz (Bulgaria), Transgaz (Romania), MOL (Hungary) and OMV.

The Nabucco gas pipeline project, which will construct a pipeline running 3,400 km from Turkey to Austria, is valued at an estimated at 4.4 billion Euros, and with a capacity of up to 30 billion cubic meters a year, will transport gas from the Middle East and the Caspian region through Turkey, Bulgaria, Romania and Hungary to Baumgarten in Austria.

Turkey has already declared its readiness to be a transit state, according to the Bulgarian Sofia News Agency.

The two ministers also discussed bilateral trade, economic and energy relations between their neighboring countries, according to Sofia News Agency.

Should Bulgaria decide to import gas from Egypt, they will join the ranks of many European nations who have looked toward Egypt to supply their gas needs.

While the discovery of natural gas in Egypt is relatively new compared to gas-bubble nations, the country has swiftly risen among the ranks to become one of the leading gas suppliers in the world.

Already, in a short time span, many developments have taken place in this sector in the country.

In 2003, the Arab pipeline project was launched, through which Egypt exported gas for the first time in the country’s history. The Mubarak Complex for Gas and Petrochemicals in Damietta started exporting natural gas in 2005 to Spain and Italy. This pipeline, with a total investment of $1.4 million, has a capacity of 4.8 billion cubic meters per year, with an aim to export 7.5 billion cubic meters per year.

The three phases of the natural gas project in Idku, where investments reached $19 million, have been launched, exporting 5 billion cubic meters of gas per year to France, the EU, United States and Italy.

In February 2006, the Egyptian Minister of Petroleum announced that Egypt will start carrying out two large projects for petrochemicals with investment from the Egyptian private sector and Canada for a total cost of $1 billion. Together, the projects will produce 1.65 million ton of Methanol and Polypropylene.

The first project will produce Methanol from the Mubarak complex for Gas and Petrochemicals. The investments allocated for this project will be $620 million with a production capacity of 1.3 million tons annually.

The second project will be producing propylene and polypropylene. The expected production will be 350 thousands tons annually of polypropylene with an investment of $350 million, while this investment may increase to reach $400 million, according to the ministry.

Centurion Energy International Inc., meanwhile, signed a Farm-in and LNG agreement with Shell Egypt in March 2006. Through the agreement, Shell will acquire a 50 percent interest in two Centurion-operated exploration concessions in the Nile Delta onshore Egypt, namely the West El Manzala and West El Qantara concessions. Shell and Centurion will also cooperate in developing LNG opportunities if quantities of natural gas are discovered on the concessions. The first well of the five in the exploration program was launched on Feb. 7, 2006.

Centurion Energy International Inc. has also entered into an agreement for the acquisition of a private U.S. corporation; the acquisition includes operated properties in Egypt’s Nile Delta region and in Texas. After closing, this acquisition will add approximately 8,200 Boe per day to Centurion’s production, and is expected to be completed by April 30, 2006.

New oil discoveries were also found in the Gulf of Suez by Gupco, and in the Western Desert by Agiba, in February 2006.

The American Petroleum Institute (API) also held its first certification programs workshop in Cairo on Feb. 17, 2006. Sixty professionals representing pipeline and refinery operations, in addition to equipment manufacturers, attended the event.

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