Egypt, Italy's Eni discuss establishing $150 mln LNG import terminal in Damietta
Eni has been a major player in Egypt's oil and gas industry for years.
In November, it made headlines by announcing that it would resume drilling two new gas wells in the Zohr field after a three-year hiatus.
This month, the Ministry of Petroleum and Mineral Resources emphasized that the company's drilling ship will arrive in Egypt in January to begin operations. It will utilize advanced technologies to boost production, complying with the approved production plans.
Eni's role in Egypt’s energy sector has been pivotal since it discovered the Zohr gas field in 2015. This significant finding has allowed Egypt to achieve gas self-sufficiency by 2018.
In 2023, the company committed to investing $7.7 billion in Egypt over the next four years to advance its exploration and production activities further.
However, Egypt’s LNG exports sharply declined in 2024, falling by 84 percent to 0.540 million tons, down from 3.38 million tons in 2023.
This drop was attributed to a natural gas shortage due to declining domestic production, increasing demand in the electricity sector, and growing industrial needs.
Notably, Egypt ceased LNG exports in May 2024 and began importing LNG for the first time since 2018.
The government has taken several steps to address the energy shortfall.
In 2024, Egypt imported approximately 2.5 million tons of LNG and has been actively working on diversifying its energy mix.
Moreover, Prime Minister Mostafa Madbouly emphasized the importance of renewable energy and highlighted efforts to increase the share of electricity generated from renewable sources to 58 percent, up from the previous 20 percent.
Egypt has also focused on green hydrogen and renewable energy technologies, signing seven memoranda of understanding (MoUs) in February 2024 for projects worth $40 billion.
Meanwhile, domestic gas production has been declining. In May 2024, Egypt's oil production dropped by 30 percent from its peak in March 2021 to 4.288 million m3, according to data from the Joint Organizations Data Initiative (JODI).
This decline underscored the urgency of finding solutions to the country’s energy needs.
The government raised the price of natural gas three times in 2024, with the latest increase in September ranging from 15 to 25 percent.
Gas discovery in Egypt
According to Asharq Bloomberg, ExxonMobil, a US-based multinational oil and gas corporation, discovered natural gas reserves off the coast of Egypt after successfully drilling an exploratory well in the Mediterranean Sea.
In 2023, ExxonMobil announced it had obtained exploration rights for two offshore blocks in Egypt's outer Nile Delta, further strengthening its exploration portfolio in Egypt and the East Mediterranean.
Following a 2024 farm-in agreement with Qatar Energy, ExxonMobil now holds a 60 percent participation interest in the two exploration blocks, while Qatar Energy holds the remaining 40 percent.