Egypt calls on Italy for an “integrated approach” to energy
27 February 2018

“Energy” relations between Italy and Egypt look to be strengthening. The state-run news agency, Mena, reported on a meeting in Cairo earlier this month between the Egyptian Minister of Electricity, Mohamed Shaker, representatives of Italian companies from the energy and environment sectors, and the Italian ambassador, Giampaolo Cantini. Shaker presented Egypt’s plans for the electricity sector and is reported to have said that he is ready to open communication channels between Italian companies and the Egyptian parties involved to increase investment opportunities in Egypt, especially in the new administrative capital between Cairo and Suez.

The development programme will be based on a competitive auctioning mechanism; the minister specifically mentioned the waste-to-energy, storage, smart meters and public led lighting sectors, and is hoping Italy will bring innovation and investment. The minister also encouraged Italian multi-utilities companies to become more active in the Egyptian market, as they boast an integrated approach that Egypt lacks.

Egypt is moving from deficit to surplus status in energy generation, through a mix of nuclear, coal, renewable and, above all, gas. This is thanks to the discovery of Zohr back in August 2015 by the Italian group Eni. Zohr is an enormous natural gas field under the sea just off the Egyptian coast. Eni, which holds 60% of the group having sold 35% to the Russian government-controlled oil company Rosneft (which has just announced that it will invest two billion dollars in Zohr’s development over the next three years), has begun producing a year ahead of the schedule set last December, when the gas began arriving in Port Said. The country has thus just entered a new phase in its history. The Zohr field is so rich that besides being able to meet the country’s entire energy demand, it will also enable Egypt to become an exporter.

In fact, according to the Financial Times, Egypt will achieve – for the first time – total energy independence within eighteen months. This means that the country will not only be able to call an end to importing gas but also have enough gas to become a producer and exporter. According to the Egyptian government, the country might need less time: the Minister of Oil, Tarek Al-Molla, has stated that they hope to achieve self-sufficiency by year-end. And according to the government, Zohr and the end of imported liquefied natural gas will enable Egypt to save USD 230 m every month.

In the meantime, activities in other fields continue. By June, the Egyptian Natural Gas Holding Company (Egas) will launch a tender for gas exploration at nine offshore and onshore concessions. The Egyptian energy company Petrobel (a joint venture between the Egyptian Egpc and Eni subsidiary Ieoc) has announced that the 2018–19 financial year (which starts on 1 July) will see the drilling of five wells – and their coming into operation – at the offshore gas field of Baltim South West. According to Petrobel’s chairman, the five wells will come into operation by 1 July 2019. A pipeline will be extended to connect the Abu Madi gas treatment plant in the Nile Delta and the Gamil plant in Port Said. The extended pipeline will also take on the flow from Baltim South West. Additionally, Abu Qir Petroleum Company (a joint venture between the Italian company Edison, whose parent company is EDF, and the Egyptian company Egpc) has plans to drill an exploration well off the coast of Sidi Salem, at the North Abu Qir offshore concession.