Italy’s Eni has signed a series of agreements with Egypt, paving the way for the Damietta LNG plant to restart operation by the first quarter (Q1) of 2021, the company announced on Tuesday.
The agreements were signed between the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS), and the Spanish company, Naturgy.
The liquefaction plant’s owner is the Spanish Egyptian Gas Company (SEGAS), which is 40% owned by Eni through Union Fenosa Gas. The plant has a capacity of 7.56bn cbm per year, but has been idle since November 2012.
According to a statement, Union Fenosa Gas’s 80% stake in SEGAS will be split between Eni and EGAS at 50% and 30% respectively.
As a result of the agreements, SEGAS will now be 50% owned by Eni, 40% by EGAS, with 10% owned by the EGPC. Eni will also take over the contract for the purchase of natural gas for the plant, and will receive corresponding liquefaction rights.
This will see the volumes of LNG in its portfolio increase by 3.78bn cbm per year, which will be available on an FOB basis, with no destination restrictions.
They will also lead to the amicable settlement of the pending disputes between Union Fenosa Gas and SEGAS, on the one hand, and EGAS and Egypt, on the other. It will also see the subsequent corporate restructuring of Union Fenosa Gas itself, whose assets will be shared between the partners Eni and Naturgy.
Eni said that the agreements, which are in line with the ones finalized last February and take into account the evolution of the energy scenario, allow to reinforce Eni’s strategic objectives in terms of growth of its LNG portfolio, in particular in Egypt, where the company is the main gas producer, and are of primary importance for all parties involved to resolve all pending disputes.