QatarEnergy and the Egyptian government have inked a preliminary deal for the supply of at least 24 cargoes of liquefied gas to Egypt this year, as the North African country seeks to diversify its sources of energy.
The deal follows another, long-term one, which the Egyptian government closed with the Israeli government last month. The deal is worth $35 billion, the National noted in a report on the news. Per the terms of that agreement, Israel will export 130 billion cu m of natural gas from the giant Leviathan field in the Mediterranean at a fixed price.
Last year, Egypt’s Israeli gas imports hit an all-time high of 981 million cu m, representing an annual increase of 18.2%. Generally, imports of natural gas from Israel account for a fifth of Egypt’s total gas imports.
The latest deal, with QatarEnergy, will not only secure the country’s electricity needs during peak demand season in the summer but also strengthen its role as a regional gas trading hub, according to the Egyptian side.
Egypt is a rather sizable natural gas producer itself, but the last few years or so have seen its production decline instead of grow, despite major investments – and investment commitments – by big Oil majors. Egypt’s gas production appears to have peaked in 2021 at a daily rate of 6.6 billion cubic feet. As of last year, production stood at less than 5 billion cubic feet daily.
The production decline has been attributed mainly to natural depletion at mature fields, including Zohr, which alone accounts for as much as 40% of Egypt’s gas production. The Zohr field was only discovered in 2015 and began production in early 2018. At the start, the field produced some 250 million cubic feet, which expanded to 2 billion cubic feet by September of the same year. Peak production was seen at 2.7 billion cubic feet.
By Irina Slav for Oilprice.com
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