Egypt 'May Let Damietta Reopen' - Report
An Egyptian newspaper report has brought the first official response to the announcement by Union Fenosa Gas (UFG) September 3 that it won a $2bn-plus arbitration settlement against Cairo.
Daily News Egypt quoted an unnamed petroleum ministry official as saying it had yet to receive the official notification of the ruling from the Washington-based arbitration tribunal ICSID. But the official also said the ministry will now seek to negotiate with UFG the possible re-supply of gas to the Damietta LNG plant, though only after Egypt achieves self-sufficiency of natural gas by the end of 2018.
The full report, published September 13, can be read here.
The 5mn mt/yr capacity Damietta export plant – owned by Segas, itself 80%-owned by UFG and 20% by Egypt's state Egas and EGPC – opened in 2005, built on the basis that Egypt would supply its feed gas.
The final arbitration settlement is expected to be nearer $2.2bn. UFG, which is 50-50% owned by Italy's Eni and Spain's Naturgy, told NGW last week it hopes to get the Damietta LNG export plant back and running soon. As Egypt's indigenous demand grew earlier this decade, the supply of feed gas to both Egypt's LNG export plants dried up in 2012 – with a non-UFG plant at Idku only recently restarting.
Eni-operated fields have enabled Egypt to become self-sufficient in gas once more. This week it announced that the giant Zohr field is now producing 2bn ft3/d, one year earlier than scheduled.