The Italian energy giant, Eni says that is the “largest ever” natural gas field, located in the Mediterranean inside Egypt’s territorial waters. In an area of about 100 square kilometers, there could be as much as 850 billion cubic meters of lean gas. This means that there could be 5.5 billion barrels of oil located there. It could potentially be one of the world’s largest natural gas finds and meet Egypt’s own natural gas demands for decades to come.
Eni is the biggest foreign energy firm in Africa. In June, it signed an energy exploration deal with Egypt to allow them to explore the areas of Sinai, the Gulf of Suez, the Mediterranean and the Nile Delta.
This is a huge game changer for Egypt whose natural gas production had fallen 16 percent from two years ago and exports have decreased almost 70 percent since 2009. However, their domestic energy consumption has only been rising – over 50 percent for the past decade.
It seems that this supergiant gas discovery in Egypt is a huge wake up to Israel. By delaying the final approval of the gas outline and not moving forward with exploration, they are missing out on opportunities.
Noble Energy and Delek Group has been negotiating long term contracts for years to sell gas to customers in years, but they have always been help up by regulatory uncertainly from Israel. Israeli Energy Minister, Yuval Steinitz and Prime Minister, Benjamin Netanyahu have been trying to get approval of an agreement that was reached with Noble and Delek to help speed up the development of most of Israel’s offshore reserves.
Israel isn’t the only country that is uneasy over the discovery. Back in March, Russia’s Gazprom and Egypt’s Egyptian Natural Gas holding Company signed a 5-year LNG supply deal, the first of which was already received. The deal will continue to be fulfilled, but an extension – not likely.
Russia has little care for if Germany or China meets their demand needs, just as long as they are met. Recently, Russia has been eyeing North Africa – Egypt with its growing oil and gas consumption and domestic production decreasing. However, now Russia’s long-term market has vanished with this discovery.
Let’s remember, gas exports from Egypt will not explode any time soon. The year 2020 is the optimistic target. No matter when, it will be an amusing change to the oil and gas field.