Discovery of new field christened as Zohr Gas Field for our Egyptian Audiences - On August 30th 2020, amidst Pandemic Crisis The Eni announced the invention of Zohr, the biggest ever fossil fuel field within the Mediterranean, at approximately 180 kilometers off the coast of Egypt. Zohr supergiant gas field lies within the Egyptian maritime borders surpassing the nearby Leviathan gas field offshore Israel. The estimated reserves of Zohr are 30 trillion cubic feet. This new development would allow Egypt to emphasis its role because the main regional player within the Energy landscape. this text focuses on the impact of the invention on gas monetization strategies within the Eastern Mediterranean region.
About Zohr field
Zohr 1X NFW well is found within the Shorouk exploration block. It covers a vicinity of 100 square km at a depth of 1,450 meters. Zohr 1X NFW was drilled to a complete depth of 4,131 meters and hit 630 meters of hydrocarbon column in an exceedingly carbonate sequence of Miocene age with excellent 2 reservoir characteristics (400 meters plus of net pay). Shorouk offshore block is an element of the old NEMED concession previously operated by Shell. Early 2011 Shell relinquished NEMED after a ten year effort to prove up commercial gas. Shorouk is found 170 km to the north of the Mediterranean shore line near EDDM development lease and covers a part of three,765 km2, in water depths starting from 1,400 to 1,800 m. The block is bounded from the North by Egypt’s economic maritime border and by North Hap’y offshore concession from the South.
Key Statistics
Discovery size: 30 trillion cubic feet
Estimated value: 60 to 90 billion USD
Largest ever gas find within the Mediterranean
One of the highest 20 largest gas fields within the world
Add near 50% to Egypt's gas reserves
Cover a minimum of 10 years of current Egyptian gas consumption
Expected production: 2018 (3 years)
What does this mean to East Mediterranean energy players
Reversing the Flow article was published on April 2nd, 2014, to elucidate how can Egypt's idle gas export infrastructure serve the energy security needs of Egypt and also the region. Gulfoilandgas.com analysts studied multiple routes to suggest the development of a replacement "Hope pipeline" for monetizing gas discoveries offshore Cyprus. Today, Egypt Gas Find could Shake Up Energy plans of nations within the eastern Mediterranean region. A revised outline for impact on neighboring countries is presented below.
Great news for Egyptians
A relevance the magnitude of gas reserves within the East Mediterranean was presented in a piece published by Gulfoilabdgas.com on June 2014, under the name of "Love Thy Enemy: The Untold Story of big Gas Reserves within the East Mediterranean". the invention comes as a giant relief for Egyptians. it'll allow them to fill the gas supply gap and satisfy the increasing local demand. it'll also present a chance for resuming gas export supported a revised healthy export strategy. Egyptians should have now a transparent understanding of a way to strategize within the right direction after learning from their (very expensive) mistakes.
The revised export strategy should - A Suggestion:
1) Recognize the priority for securing domestic needs for generations to return,
2) Ban completely all types of energy subsidies,
3) Ban the introduction of coal in Egypt energy mix,
4) Allow room for healthy and fair cooperation in conjunction with regional gas monetization.
5) Despite these discoveries, Egypt has continued to hike up gas prices. In July 2018, the government announced it would raise the price of natural gas for home and commercial use by up to 75 percent. These increases were prompted by the International Monetary Fund in hopes of improving the Egyptian economy.
Great loss for Israel
For the previous few years, Israel tried to play a meaningless role within the eastern Mediterranean energy arena. The cornerstone of their gas monetization strategy was to secure an extended term exclusive access to the Egyptian market and to Egypt's idle gas export infrastructure. within the unit of time, under the so called "East Mediterranean Energy Corridor" concept, they were persistently rushing Cyprus to create the Vasilikos LNG plant which might cost them around $12bn if built.
Egypt Gas Find is dramatically changing the rule of the sport for Israel. Egypt not needs Israeli gas. On Monday, Energy shares plummeted on urban center stock market in response to the unexpected change within the market landscape prompted by Zohr discovery. Shares for Avner Oil Exploration and Delek drilling companies plummeted by 13% and Ratio Oil Exploration by 18%. Zohr discovery is putting pressure on investment plans in Leviathan gas field looking forward to Egypt because the main consumer to get the field’s development cost. Israel hoped to sign an extended term deal to export Leviathan gas to Idku plant in Egypt through British Gas. Tamar field could also suffer as its partners hoped to export 25% of their gas to Damietta LNG trough Union Fenosa.
More options for Jordan and Lebanon
On April 3, Israel announced a $500 billion deal for the sale of 1.87 bcm of gas from Tamar gas field to Jordanian companies Arab Potash and Jordan Bromine over the subsequent 15 years. With the new discoveries, more options are now available to Jordan and Lebanon if Egypt resume export through the Arab gas pipeline.
Golden opportunity for Cyprus
On November 25th 2014, the plan for a brand new Gas Pipeline from Cyprus to LNG plants in Egypt was announced at a tripartite Egyptian-Cypriot-Greek meeting in Cyprus. The move echoed Gulfoilandgas.com strategy proposed in early 2014, which described how Cyprus could send gas from its Aphrodite field (Block 12) by a 180 km undersea pipeline to Damietta LNG in Egypt.
Today, Zohr discovery represents a fair better opportunity for monetizing the Cypriot gas. The approximate distance between Shorouk block and therefore the Cypriot block 12 lies within the range of 30 to 40 km. Gas pipelines and transportation infrastructure are built and/or upgraded anyway to move gas findings from Shorouk block to the Egyptian shore for either export or local consumption. Such close proximity means a comparatively small investment is required from the Cypriot side to construct the marine gas pipeline segment that merge with Zohr gas installation so as to take advantage of the existence of such infrastructure at the Egyptian side.
For Cyprus, this scenario represents an occasional risk and high revenue opportunity allowing them to send Cypriot gas for further processing in Egyptian lng plants for future export. the precise scenario may well be supported the result of the revised Egyptian export strategy. For Egypt this may represent a superb buffer to fill export gaps and balance supply and demand as required in sight of fluctuations in local consumption and therefore they have to keep a number of the gas available for future generations.
Strategic Implications
Potential economic development for Egypt
More Emphasis to the importance of strategic ties between Cyprus and Egypt
Reduction of the probabilities for monetizing gas discoveries offshore Israel
On the local side, this may represent one more reason to reject coal introduction to the energy mixture of Egypt
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