Egypt is working on infrastructure investments that will transform it into a regional hub for oil and gas trading, capitalizing on the needs of various companies to store their petroleum products, Petroleum Minister Tarek El Molla said at Al-Ahram’s first energy conference on Monday.
As Brent prices fell to $30-40 per barrel, companies are favoring storage until prices go up again, boosting demand for floating storage.
“We would be attractive for companies that store [gas and petroleum products],” El Molla said, pointing out that Egypt has 15 million tonnes of capacity for the storage of crude and petroleum products.
In recent years, Egypt's petroleum ministry has been investing in storage facilities, refineries, pipelines, ports and liquefied natural gas (LNG) stations, the minister said, with 19 petroleum ports on the Mediterranean Sea and the Gulf of Suez, and two natural gas liquefying plants, Idku and Damietta.
“We are working on expanding piers and the depth of ports, as well as storage capacity,” El Molla added.
He said Egypt aims to be a regional hub for energy trading, saying it would become a “free economic regional center for the trading of oil and gas (like Rotterdam and Singapore) and a strategic center to export energy that is produced from Egypt’s own resources or energy imported from neighboring countries, responding to the needs of the Egyptian market and of main markets in other countries.”
Referring to Rotterdam and Singapore, the minister said, “We try to take their best practices ... to position Egypt as an energy hub."
Reiterating that Egypt is focusing on the transit of natural gas and petroleum products for export through infrastructure investments, El Molla said, “What will give us sustainability is the trading.”
Saudi Arabian crude is already transported through SUMED pipelines from Sidi Kreir, going from east to west, or from north to south. In addition, Egypt is in talks with Kuwait to export petroleum products.
Egypt has 9,500 kilometres of pipelines to transport crude and petroleum products, and eight refineries with a designed capacity of 38 million tonnes per year, according to El Molla.
On refineries, El Molla said, “With the exception of MIDOR, we need to renovate refineries to fit international standards.”
EU targeted as consumer for energy hub
An updated cooperation protocol on energy with the European Union will be signed in the beginning of March 2018, with the EU expected to be the main consumer for energy transported from Egypt for trading, El Molla said.
The cooperation protocol on energy with the EU was signed in 2008.
The petroleum ministry is working on linking Mediterranean nations to plants in Egypt for gas liquefaction to be ready for gas trading.
Turning Egypt into a regional hub for the energy trade will respond to local demand, attract direct and non-direct investments, and generate job opportunities, El Molla said.
The ministry has contracted an international consultant to prepare the strategy for the regional hub and a roadmap will be prepared for implementing the strategy.
Natural gas law executive regulations
El Molla also announced that the executive regulations for the law regulating the natural gas market will be issued before February 2018.
The law, which was issued in August this year, will support the private sector’s work in the Egyptian market, the minister said.
An independent authority will be formed to regulate the market for transport, storage and export.
The authority will work on allowing the private sector to use natural gas transport networks, as well as setting fair prices, amidst a monopoly of state companies over the networks.