Egypt ready to be energy exporter

Flushed by its Zohr gasfield, it can become region’s LNG Supplier

The United States and Russia are lining up to sell gas to the oil producers of the Middle East this year. They may, however, face unexpected competition from the region’s sleeping giant, Egypt.

The North African state is bringing onstream about 350 million cubic feet a day of gas this year from the Zohr field, offshore the Mediterranean. The massive field discovered by Italian oil and gas firm Eni is estimated to hold 30 trillion cft of gas and is set to become the cash cow that will end Egypt’s economic and energy deficits.

The Arab world’s most populous country hopes to eliminate LNG imports completely by 2019 as it looks to become a gas-exporting hub.

The natural markets for its resource would be Saudi Arabia and the UAE, with whom Egypt’s ties, economically and politically, go a long way. The two GCC states have helped Egypt through its political

For Egypt, its transformation into an exporter will bring about much needed government income

turmoil and have channelled billions of dollars in credit lines to the state. It is very likely that Cairo would offer to sell some of its gas to its neighbours first.

For Egypt, its transformation into an exporter will bring about much needed government income and put it on the path of economic self-reliance.

For the oil producers of the Gulf region, who are deficient in gas, a local source that is politically palatable is welcome news. Saudi Arabia and its neighbouring oil states face a deficit of at least 2 to 3bn cft a day, according to London-based Facts Global Energy.

Together Iran and Qatar have abundant gas sources, but politics has kept their fuel from finding markets closer to home. While the UAE continues to import 2bn cft a day of gas from Qatar through the Dolphin Pipeline, the volumes are not sufficient to meet growing demand for power, particularly during peak summer times. The emirate of Sharjah is in fact set to join the list of LNG importers when it opens its terminal in 2019.

Saudi Arabia faces a similar predicament as it moves its power plants to the cleaner and economically efficient gas, while loading its oil up for export. The kingdom is prioritising the resource, and awarded US$4.5bn worth of contracts in November to ramp up gas production, which it hopes to double by the next decade.

Egypt’s new role as an LNG player could change the region’s supply chain.