Egypt expects 30% increase in imports of Israeli gas for export

CAIRO - 8 October 2023: Egypt's imports of Israeli gas for export purposes are expected to increase by about 30 percent  in the near future, according to Tarek El Molla, the Minister of Petroleum, following the Egyptian-Israeli-European gas agreement that has already led to a 40 percent  increase in the quantity of gas imported from Israel to Egypt since January 2021. 

 

He added in a recent interview with Asharq Business with Bloomberg that Egypt's current gas production rate is approximately 6 billion cubic feet per day, and the stability of these rates by the end of the current fiscal year is subject to companies' commitment to implementing field development and growth operations to achieve production targets.

 

Israeli gas primarily serves the local market and is also exported to Jordan and Egypt, which liquefies the gas and exports it to Europe.

 

Israel began exporting natural gas to Egypt in January 2020, marking the most significant deal since the Camp David Peace Accords between the two countries in 1979.

 

Israel aims to increase gas supplies to Egypt, as the government approved a plan in May of last year to build a pipeline in the south of the country, stretching 65 kilometers to the border with Egypt, to transport 6 billion cubic meters of gas annually.

 

Egypt has two natural gas liquefaction plants with a total daily production capacity of 2.1 billion cubic feet, and exports depend on its surplus production and gas imports from neighboring countries.

 

Gaza Marine

 

El Molla also predicted the completion of the Gaza Marine field development project in less than two years, through a consortium of Egyptian private companies led by the government-owned “EGAS”, in partnership with Palestinian entities. 

 

The Gaza Marine field, located about 30 kilometers off the coast of Gaza between the Leviathan and Tamar gas fields, contains over a trillion cubic feet of natural gas, significantly more than the Palestinian territories' needs.

 

The field is seen as an opportunity for the Palestinian Authority, which is suffering from a lack of funds, to join the gas boom in the eastern Mediterranean, providing a significant source of income to reduce its dependence on foreign aid and Israeli energy.

 

On another note, the Minister of Petroleum confirmed the completion of the agreement for Abu Dhabi Development Holding to acquire stakes ranging from 25% to 30% in the Egyptian Ethylene and Derivatives Company (ETHYDCO), the Egyptian Linear Alkyl Benzene Company (ELAB), and the Egyptian Drilling Company (EDC) for $800 million by the end of this year after fulfilling some paperwork.

 

Gas Exports

 

Egypt's exports of liquefied natural gas amounted to about 3 million tons during the first half of this year, according to El Molla, who added that his country would resume exports in October after the summer season, during which Egypt stops exports to meet domestic needs. He expected that export volumes in the first half of 2024 would not be lower than those achieved in 2023.

 

Egypt's natural gas exports increased by 14.3 percent in 2022 to 8 million tons, compared to 7 million tons in 2021, earning $8.4 billion from gas exports in 2022, up from $3.5 billion in 2021, a 140 percent increase.

 

Egypt continued its liquefied gas exports until last June, before the country, aspiring to become a regional natural gas hub, halted exports in July due to a power crisis - the first since 2014 - caused by rising temperatures and a shortage of the necessary fuel to operate power stations at their required capacity.