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24 February 2019

Cairo returns to export market thanks to a huge boost from BP gas fields

Egypt’s massive Zohr gas field will near its optimum output this year, meaning that the country’s overall gas production will be at an unprecedented level. This should position Egypt as the regional hub for gas exportation, and there is hope that due to its benefits in location and infrastructure it will become the key international centre for gas.

Zohr, the biggest gas field in the Mediterranean, was only discovered in 2015 but has proved to be a fulcrum in the country’s rapid change in fate. Until recently, Egypt was spending billions on importing liquefied natural gas (LNG), but is now enjoying keen international investment in their own production. Beyond that the country is hoping to export LNG themselves across the Mediterranean, starting with Jordan. Domestic production levels stand at about 6.6 billion cubic feet per day, 2.1 billion of which is from Zohr.

Egypt is BP’s largest investment location in the world, for the second year running, which shows how committed to the region the big players of the industry have become. Among several huge sites in the country, Zohr will near its peak production of about 3 billion cubic feet per day by the end of the year, boosting potential export capacity exponentially. Production at BP’s West Nile Development looks set to hit 1.4 billion cubic feet per day (bcfd) which is no short shrift and in parallel to this, Total, the French oil major, is talking of developing downstream petrochemicals in Egypt having bought a stake in Idku, one of two liquefaction plants.

The results of two exploration tenders held last year for 27 blocks saw a high turnout from international companies. The winners have just been announced with a total of 12 concessions awarded. The winning companies include Royal Dutch Shell, Eni, Merlon, Neptune Energy, and Egypt's General Petroleum Company (EGPC). Five concessions for gas exploration were awarded, to companies including Royal Dutch Shell, Exxon Mobil, Petronas, BP, Dea, and Eni.

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Cairo BP gas fields