(Bloomberg) -- Egypt is set to boost exports of liquefied natural gas by restarting one of its two production plants.
The Damietta facility, which has been idled for eight years, will reopen by the end of February, Oil Minister Tarek El-Molla said in an interview Wednesday with Dubai-based consultancy Gulf Intelligence. It will process about 4.5 million tons of LNG a year and raise the nation’s capacity to 12.5 million tons, he said.
The return of Damietta and the country’s other plant -- Idku, whose exports have picked up after dropping last year amid the coronavirus pandemic -- will mark a revival of Egypt’s LNG push.
While the Arab nation is a relative minnow -- accounting for about 1% of global LNG supplies in 2019 -- it will become one of the top 10 exporters if it reaches full capacity, according to data compiled by Bloomberg.
Bookings Up
“In 2020, the prices were very low and we were not able to export except for a few cargoes,” El-Molla said. “But starting from October 2020 until now, we have already booked all our volumes to be exported from the Idku plant up till the end of March.”
Egypt plans to use its position on Europe’s doorstep to become a major supplier to the continent, which is transitioning away from dirtier fossil fuels such as oil and coal. Egypt will ship gas from its own giant field of Zohr, as well as some imported from Israel.
LNG prices have recovered since late last year, thanks in part to the development and roll-out of virus vaccines. Prices spiked in Asia this month because of a severe winter.
Damietta was idled in November 2012 amid a dispute over gas supplies between the government and Union Fenosa Gas, a joint venture between Spain’s Naturgy Energy Group SA and Italy’s Eni SpA.
In the next two weeks, Egyptian state firms EGPC and EGAS will offer onshore and offshore exploration blocks for bids from energy companies, El-Molla said.
© 2021 Bloomberg L.P.
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