Monday, May 15, 2017

Egypt gas production surging

Egypt is holding talks with its liquefied natural gas (LNG) suppliers to defer contracted shipments this year and aims to cut back on purchases in 2018, as surging domestic gas production squeezes out demand for costly foreign imports.


At the heart of Egypt's revival is a stunning run of discoveries, a potential boon for the government as it embarks on politically sensitive economic reforms and struggles to rein in inflation running at a three-decade high.

"Test flows from (BP's) West Nile Delta have started ahead of schedule and Eni's giant Zohr find is progressing quickly on track for first gas later this year, but it's output from the Nooros field that has surprised everyone this year," said Adam Pollard, senior North Africa oil and gas analyst at Wood Mackenzie.

Eni's Nooros is churning out 900 million cubic feet of gas daily, Pollard said, becoming Egypt's biggest producing field since it came on stream late in 2015.

Production from two BP fields in the West Nile Delta development, Taurus and Libra, just started eight months ahead of schedule. Its North Alexandria gas fields are set to boost output as well.

Great news for Egypt as the more gas that is produced in country the more wealth can be kept in the country. In addition, energy is the basic building block for an economy. I remain long the Egypt ETF (EGPT).

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