After five years of decreasing gas production and changing from a net exporter to a net importer, Wood Mackenzie claims that the country’s fortunes are set to change. The global natural resources agency claims that a number of offshore gas developments are due to come on stream within the next few years, and that these new volumes will push the country’s gas market back to surplus. These projects include BP’s West Nile Delta and Atoll fields and Eni’s massive Zohr discovery, which combined are expected to add a cumulative 41 billion m3/yr of gas production by 2022.
Nevertheless, Wood Mackenzie claims that, according to its analysis, this surplus will be seasonal. Indeed, improved gas availability will boost domestic consumption in the power sector, peaking in the summer months, whilst utilisation rates at gas-intensive industries will recover. Overall, this will exacerbate Egypt’s domestic gas demand seasonality. In the medium-term, Wood Mackenzie claims that LNG imports may still be crucial in balancing the market in the summer, whilst the country could export surplus volumes during the winter months, taking advantage of northern hemisphere winter LNG prices.
This change in fortune has been driven by excellent exploration results, as well as higher gas prices. The Petroleum Ministry’s practical approach to pricing has secured over US$28 billion in investment in Egypt’s upstream sector since 2015, at a time when inward investment fell in other regions. In addition to a number of high-impact wells planned for 2017, as well as Egypt’s untapped potential, Wood Mackenzie claims that a second gas boom could be on its way.
Further exploration success would strengthen Egypt’s goal of becoming a regional gas hub, importing and exporting gas and LNG at the same time.
Read the article online at: https://www.lngindustry.com/liquefaction/12012017/egyptian-gas-market-set-to-undergo-major-change/