GLNG: Egypt, EU poised to agree on LNG exports

Egypt is poised to sign a memorandum of understanding (MoU) with the EU on deliveries of gas extracted from Israeli fields in the eastern Mediterranean and processed into LNG at Egyptian terminals. The signing will take place in late June, when European Commission President Ursula von der Leyen visits Cairo.

The EU is keen on deals with gas-rich countries in the wake of Russia’s invasion of Ukraine, to diversify its hitherto heavy reliance on Russian natural gas supplies. By signing the proposed MoU with Egypt, the EU stands to take a major step forward to secure a stable supply of gas from the eastern Mediterranean over the long term.

For some time now, Israel has been expanding co-operation with Egypt on this front, connecting its gas fields in the eastern Mediterranean to Egypt’s existing LNG plants in Damietta and Rosetta. Additionally, some of the 5bn cubic metres per year of Israeli gas that flow to Egypt via the Eastern Mediterranean Gas (EMG) pipeline, a subsea link that runs from Ashkelon to Arish, goes to the Damietta and Rosetta LNG plants.

Accordingly, additional Israeli supplies could help the two Egyptian facilities operate at their full capacity of 12.2mn tonnes per year (tpy), up from their current utilisation rate of 84%.

Egypt's earnings from gas and LNG exports were up by 98% year on year to $3.89bn in the first four months of 2022. This came on the heels of a 768% jump in natural gas export revenues to $3.95bn in 2021, compared with $456mn in 2020.