Egypt Launches Gas Hunt Amid Crunch Fears

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Much is riding on a $1.8 billion, two-year drilling program in Egypt that is targeting gas prospects in its Mediterranean deepwaters and Nile Delta. Talk of another gas-supply crunch — which could occur as early as mid-2024 — has raised the stakes. While Egyptian Petroleum Minister Tarek el-Molla denied that a doomsday scenario is looming in a discussion with Energy Intelligence, he admitted that Cairo is seeking to reduce gas consumption by 20% as piped gas imports are ramped up from neighboring Israel. The fear is Egypt could relive the gas crisis it suffered roughly decade ago that briefly turned it into an LNG importer. Eni’s landmark 30 trillion cubic feet Zohr gas discovery in 2015 proved a lifeline, later providing gas self-sufficiency and igniting an exploration renaissance. Now, Exxon Mobil, Shell, Chevron, BP, Eni and Wintershall Dea are all planning to drill for gas, el-Molla says. There are plans to drill 35 new wells in the Mediterranean and onshore in the Nile Delta over the next two years. El-Molla notes that this year’s mild winter has helped ease the supply situation and that consumer trends and a changing energy mix must also be considered. Still, data from state Egyptian Natural Gas Holding show consumption rising steadily from 5.7 billion cubic feet per day over 2017-18 to 6.1 Bcf/d over 2021-22. That growth trend is not changing this year, while preliminary supply data show domestic gas production dropping back to 6.4 Bcf/d from 6.7 Bcf/d in 2021-22. Meanwhile, Israeli gas is factoring more and more. Israeli energy ministry data show piped exports to Egypt rising 98% from just 0.1 Bcm in 2017 to 6.3 Bcm last year.

Gas Supply, Gas Pipelines, Gas Demand, LNG Supply
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