EGYPT – The Ministry of Petroleum seeks to increase the local gas production to about 8bn cubic feet per day (scf/day) by the fiscal year (FY) 2020/21, compared to 7bn scf/day currently.
A source in the petroleum sector told Daily News Egypt that Egypt has gas surplus of 1.3bn scf/day, which is directed for export through the Idku liquefaction plant and the Egypt-Jordan gas pipeline.
He said that the development plans of the new discoveries will increase gas production to 7.5bn scf/day in the second half of FY 2019/20, and the surplus will rise to about 1.5bn scf/day.
The source pointed out that gas consumption in Egypt rises by about 5% annually, including power stations, factories, cars, and households.
He explained that natural gas projects currently under development would increase the production to about 8bn scf/day by the next fiscal year.
This he says, would stabilise production rates until 2024, while compensating for the natural decline of fields, with a surplus of up to 2bn scf/day.
The source added that the surplus from domestic consumption will be exported through the Idku and Damietta liquefaction plants and the Egypt-Jordan gas pipeline, in addition to starting to transferring gas from Israel to Europe.
He pointed out that the Ministry of Petroleum is seeking to expand the establishment of value-added industries.
These include petrochemicals, which are based on derivatives of natural gas produced locally, which would achieve an additional return for the country from its export to global markets.
The source said that these plans are based on current petroleum discoveries, and they are subject to change if any new gas discoveries were made by the companies operating in the areas of research and exploration in different places in Egypt.
He pointed out that the average cost of one million British thermal units of natural gas produced locally in accordance with the development agreements is US$4 without calculating the state’s share of gas produced locally.
The government will review gas selling prices to the industrial sector periodically, in line with global pricing changes, in addition to granting incentives to factories to encourage investors to expand their production capacities.
The source said the current government plan seeks to create new industries based on natural gas to benefit from the large productive capacities that Egypt has achieved, which contributes to increasing national income and providing many job opportunities.
Most of the gas in Egypt is used in electricity production with the sector representing 61% of the total consumption, while the rest of sectors, such as industry, household, and cars, represent 39%.