Egypt announces that it will increase its exports of liquefied natural gas (LNG), particularly to the European Union.
Increase in gas exports
Egypt’s Minister of Petroleum and Mineral Resources says Egypt will increase LNG exports by 14% in 2022. They will then reach 8 million tons. European Union countries are benefiting greatly from this increase in Egyptian gas exports.
The European Union has been the recipient of 90% of LNG exports this year, compared to 80% in 2021. Egypt’s gas will have a strategic role for the countries of the old continent that seek to reduce their dependence on Russia following the invasion of Ukraine. This also represents an opportunity for the North African producer to fill the gap left by the decline in Russian imports into the European Union.
In addition, Israeli gas will be supplied to the EU through Egypt’s LNG export infrastructure. The European Commission, Israel and Egypt reached a trilateral agreement to this effect in June. Egypt is a major gas producer.
Increase in gas production
Its production has increased in recent years, as the country has significant offshore gas resources. It benefits in particular from the possession of the giant Zohr field. Total Egyptian gas production amounted to 71 Bcm in 2021, an increase of 10 Bcm compared to 2020.
In order to export this additional production, Egypt has two LNG export facilities. The first, Idku, is operated by Shell and has a capacity of 7.2 million tons per year. The second is the Damietta plant, with a capacity of 5 million tons per year.
This infrastructure is essential for European gas supplies from Egypt and Israel. Egypt and its LNG thus have a major role to play in contributing to European efforts to reduce dependence on Russian gas. However, the JKM reference price reached an all-time high of $84.762/MMBtu in March.
