Pumping operations began on Saturday on Egypt's super-giant Zohr gas field, bringing the country closer to achieving its goal of self-sufficiency in the supply of liquefied natural gas (LNG).
Experimental production began at Zohr at an initial 350 million cubic feet per day (mcfd), an event eagerly awaited since the field was discovered by Italian energy company Eni in 2015, making Egypt the owner of the largest gas field in the Mediterranean Sea.
Experimental operation means that gas is now being pumped from the wells at Zohr field to the pipelines and transferred to the Port Said land refinery before it is linked to the national natural gas grid, petroleum ministry spokesperson Hamdy Abdel-Aziz told Ahram Online.
The date of the official opening of the project is yet to be determined, Abdel-Aziz said.
A milestone in history of gas production: Minister
Petroleum Minister Tarek El-Molla described Saturday’s “record and unprecedented pumping” as a milestone in the history of international gas production in general and Egyptian gas production in particular, according to a statement issued on Saturday.
Once the first stage of the project is completed in June 2018, production will increase to 1 billion cubic feet per day (bcfd), meaning Egypt will have achieved self-sufficiency in LNG supply.
The second stage is due to be finalised by the end of 2019, with production reaching 2.7 bcfd, El-Molla said.
Investments for the first and second stages are estimated at over $12 billion.
“Production from Zohr will contribute to turning Egypt into a regional hub for trading gas and petroleum production,” ministry spokesman Abdel-Aziz said.
Zohr to save Egypt $2 billion: Ministry spokesperson
The Zohr project will lead to a decrease in liquefied natural gas (LNG) imports, saving Egypt $2 billion when production reaches 1 bcfd by the end of the first phase in June 2018, Abdel-Aziz said.
The production of 350 million cubic feet per day is equivalent to three LNG shipments costing $90 million, Abdel-Aziz explained.
With production costs estimated at a monthly $30 million, gas from Zohr will save a monthly $60 million, i.e. $720 million per year.
The Zohr gas field is expected to alleviate pressure on the budget and the petroleum balance of payments and save foreign currency that is spent on imports, Abdel-Aziz said.
This is in addition to increasing the allocation of money to services that help citizens.
Abdel-Aziz also told Ahram Online that trial operation began at BP’s Atoll field in the past few days.
Last week, El-Molla said that Egypt aims to achieve self-sufficiency in LNG supply before the end of 2018.
Egypt was a net exporter of LNG until 2014. However, it became a net importer in recent years due to a declining output and power shortages amid political turmoil.
In October, El-Molla announced that $27.3 million would be invested in three Egyptian natural gas fields – Zohr, North Alexandria, and Nooros – during 2018.
The three gas fields are expected to raise Egypt's natural gas output by 50 percent in 2018 and 100 percent in 2020, according to the ministry.