Italy’s Eni announced on Tuesday that it signed agreements with Egypt and Spanish company Naturgy to restart operations at a natural gas plant in the port city of Damietta after resolving long-running disputes.
According to the agreements, operations at the liquefied plant should restart in the first quarter of 2021.
The plant, which has a capacity of 7.56 billion cubic meters per year, has been idle since November 2012.
It was 80% owned by Union Fenosa Gas (UFG), a joint venture between Eni and Naturgy, with the remaining stake evenly split between the Egyptian Natural Gas Holding Company (EGAS) and Egyptian General Petroleum Corporation (EGPC).
According to the new agreement, the plant will now be 50% owned by Eni, 40% by EGAS and 10% by EGPC. The agreement will also see Naturgy exit the Egyptian market.
"The agreements ... were in line with the ones finalized last February and took into account the evolution of the energy scenario, allow to reinforce Eni's strategic objectives in terms of growth of its LNG portfolio, in particular in Egypt, where the Company is the main gas producer, and are of primary importance for all parties involved to resolve all pending disputes," Eni said in a statement.
"The operation, subject to the authorization of the European authorities and subject to the fulfilment of certain conditions precedent, allows to strengthen the presence of Eni in the Eastern Mediterranean, a key region for the supply of natural gas, an important resource for the energy transition.
"The agreement comes at an important moment, when also thanks to the fast time to market of Eni's natural gas discoveries, especially the ones in the Zohr and Nooros fields, Egypt has regained its full capacity to meet domestic gas demand and can allocate surplus production for export through its LNG plants."