Page 12 - GLNG Week 48 2020

GLNG COMMENTARY GLNG

pandemic led to the asset’s devaluation. said. Furthermore, the deal “resolves a com-
Egyptian gas production rose 12.4% year on plex situation lingering since 2012 and which
year to a record 7.2bn cubic feet per day in the couldn’t be resolved in the spring because of the
12 months ending June 30, or 9.3 bcm in total, pandemic.”
according to Egypt’s petroleum ministry. Egypt
has another LNG export terminal in Idku, Home use
but the country was among several spot LNG Now that it is self-sufficient, Egypt also wants the
exporters that were forced to curtail production fuel to play a large role in its economy.
this year because of low prices. Petroleum Minister Tarek El Molla reported
Global LNG prices are now recovering, how- last month on Egypt’s progress in expanding the
ever, and in late October, the 7.2mn tpy Idku use of gas. The country has converted all its ther- Damietta’s
plant loaded its first export cargo in over three mal power plants (TPPs) to run on the fuel and
months. has also begun a programme to increase use by relaunch was
Eni said the agreement came “at an impor- households and in the transport sector, he said. anticipated
tant moment”. Thanks to the Italian major’s Some 5mn households have been hooked up
fast-tracked gas projects like Zohr and Nooros, to receive gas in the past six years, while there sooner, but was
“Egypt has regained its full capacity to meet are now 330,000 vehicles on the road that run
domestic gas demand and can allocate surplus on compressed natural gas (CNG), serviced by held up because
production for export through its LNG plants,” 215 CNG filling stations. The government aims
it said. to convert a further 260,000 vehicles by 2023, of delays in
Eni is looking to build up its LNG business, while bringing the number of filling stations to settlement
viewing the fuel as having stronger long-term 600. Eventually it wants to see 1.3mn converted
growth potential than oil. It also sees gas playing cars on the road, with the main focus being vehi- proceedings.
a key role in the energy transition. cles over 20 years old.
In contrast, Naturgy president Francisco The government has subsidised the cost of
Reynes welcomed the deal, saying it would vehicle conversions. Egyptians have also seen
simplify and reduce “the company’s exposure steep hikes in prices for gasoline and diesel since
to gas.” 2014 as a result of IMF-backed reforms, encour-
Naturgy will be freed from a 3.5 bcm annual aging them to switch. Not only is CNG cheaper,
gas procurement contract to supply its com- but it is also cleaner than more conventional
bined-cycle gas turbine (CCGT) plant in Spain, fuels, and its expanded use should help improve
due to continue until the end of 2029, Reynes pollution levels in Egypt’s largest cities.™

P12 www. NEWSBASE .com Week 48 04•December•2020