Natural gas projects in Damietta and Edco cities embody successive achievements and a comprehensive revival.

 

 Egypt has acceded to the Natural Gas Exporting Club after it started to export its natural gas to some Arab countries; starting with Jordan and some European countries including Spain, Italy and France.

 

 It also exports gas to the USA. Moreover, Egypt has the potentials that enable it to play a major role in the international markets to export liquidized natural gas.

 

 This is enhanced by some factors:  the growing natural gas reserves and a strong promising gas industry. Added to this is Egypt's strategic geographical location.

 

 Egypt links the Middle East, Africa and Europe. It also enjoys strong friendly relations with other countries.

Egypt has joined the world gas market through setting up two  natural gas liquidization  projects in Damietta and Edco. The liquidization   project was inaugurated at the petrochemical compound in Damietta, north east of Egypt, through joint investments with “Union  Finosa” of Spain “Enppi” of Italy.

 

 Such investments mount to US $ 1.3 billion.  Egypt contributes about 20 % of the total investments. The project capacity of 4.8 million tons of liquid gas, renders it one of the greatest liquidization   units worldwide.

 

Work in this project started three years ago after discovering natural gas in the offshore fields and oil wells in the Mediterranean Sea for the first time in Egypt. It is carried out on 730 feddans along the Mediterranean   coast with joint Egyptian-Spanish-Italian investments, while exportation is done through Egyptian-Italian investment companies.

 

The second project which  includes  two  units for liquidizing natural gas in Edco lies on the Mediterranean coast near Alexandria. This project is implemented with the contribution of “British Gas” of Britain, “Petro-Gas” of Malaysia and “Gas de France” of France, in addition to the Egyptian petroleum sector. It has been operated with the first liquidization line in the second half of 2005 with annual capacity of 5 billion m3 to be exported to France.

 

 The production of a second liquidization line, meanwhile, was to be exported to Italy and USA starting by the end of 2005 with total investments of both units that amount to US $ 1.9 billion.

The project is established on an area of 350 feddans. It accommodates 6 liquidization units and comprises two storing reservoirs, with a capacity of 140,000 m3, i.e. 170,000 tons, and 511,000 oil barrels with a  height of 50 meters and a diameter of 80 meters each.   It also includes a special harbour for exporting  liquidized natural gas on a loading quay of 2.4 Km long and a natural gas unloading and exporting quay.

 

The $ 1 billion oil  exporting project in Edco has won the prize of the best liquid gas financing project of 2003 worldwide. Procedures of operating the second production line is being finished with a total value of US $ 800 million. The investment revenues of these projects reach US $ 1 billion annually, thus contributing to paying the credit value of the international institutions and fulfilling   all commitments in less than five years.

 

The experimental exportation of liquidized gases started on December 28, 2003. Furthermore, the Egyptian gas liquidization project emanates from the projects of exporting Egyptian natural gas which started through the Jordan Arab gas line on July 27, 2003.

 

 Then came the vision for benefiting from the gas through exporting it in a liquidized form through various stages that begin by diluting, then gradual cooling until gas reaches -67 Co, purifying from blemishes, carbon dioxide, liquidizing and storing it in huge reservoirs. The capacity of each reservoir is 150,000 m3 after freezing in -160 Co. The total amount of liquidized gas  is going to reach 4.8 million tons annually, thus allowing Egypt to be a member in the gas exporting countries. Moreover, the total reserve of natural gas mounts to 67 trillion m3.    

 

Egypt's total exports of oil and gas products mount to about 30.2 million tons, including 7.2 million tons from the liquidization unit in Edco and 4.5 million tons from that in Damietta, in addition to 18.5 million tons of oil and gas products exported to Jordan with a value of US $ 5.5 billion in 2005. Furthermore, total exports of the Egyptian liquidized gas and natural gas allowed through the pipelines reach about 21 billion m3, including 17 billion m3 of liquidized natural gas.

 

Many countries benefit from the Egyptian natural gas. After joining the Natural Gas Exporters Club, the first phase of the Arab gas pipelines was opened on July 27, 2003 for exporting to Jordan . 

 

In January 2004, the convention on implementing the second phase of the Arab gas lines at a length of 390 km long was signed. Such a phase is expected to be finished by early 2006 to export gas to Jordan and fulfill its needs along the pipelines inside Jordan till the Jordanian-Syrian borders. Moreover, Egypt, Syria and Lebanon have taken positive steps to implement the future phases of the Arab gas line project.

 

On the other hand, Egypt exports gas to Spain, Italy and USA, especially after work started on Edco and Damietta projects. For the first time in the history of Egypt's oil exports, President Mubarak gave the green light on May 30, 2005, to the first shipment of the Egyptian liquidized gas exports to USA. In September 2005, a new convention was signed between “Gas de France” and the Egyptian holding company for natural gas to prospect for and use gas and crude oil in west Al-Borolos Al-Baharia area in the Mediterranean Sea.

 

 The annual value of oil exports to France from Edco project of liquidized gas for a period of 20 years is going to reach about US $ 500 million, thus the Egyptian gas contributes by 10 % to the French needs.

 

Beside these exports, expectations of the petroleum sector and the international companies working in Egypt refer to the existence of about 80-100 trillion cubic feet of additional reserves that have not been discovered yet.

 

Furthermore, Egypt is going to play an important role in the liquidized natural gas markets. Thus in 2006, it will become among the six major liquidized gas exporting countries worldwide.

 

Expectations of the competent authorities indicate that Egypt has large amounts of natural gas. For example, in July 2003, a natural gas field with a reserve volume of 500 billion cubic feet was discovered in the Delta. The field lies south of Al-Batraa' area, Daqahlia  Governorate, 120 km away from the capital city.

 

 Gas production from the well started in October 2003 with a rate of 30 million cubic feet/day. This figure increased to 100 million in 2005. Egypt is working hard to increase its production of natural gas, petrochemicals and petrochemical products to exceed 100 million tons annually by 2010. Natural gas is expected to cover 50 % of such a production, in addition to exporting 30 million tons annually of the produced gas by the end of this decade, thus helping Egypt to occupy an important position in the gas market, especially that the natural gas is expected to become one of the most growing primary sources of energy worldwide.

 

In the framework of the accelerated and developing steps in the Egyptian gas industry, Egypt nowadays is witnessing and implementing mega projects in the fields of producing, manufacturing and exporting natural gas.

 

 The Third Egyptian World Economic Forum was held in Cairo in July 2005 under the slogan “Gas Manufacture... A Push forward to Egypt Future Development Wheel”. Minister of Petroleum, Sameh Fahmy, inaugurated the conference which was attended by Dr. Fayza Abul-Naga, the State Minister for International Cooperation, Mr. Derik Blumbly, the British Ambassador to Egypt, Mr. Shafiq Gabr, the Chairman of Egypt's World Economic Forum, in addition to a number of world oil company chairmen, experts of the European Investment Bank and the world financing institutions and leaders of oil sector in Egypt.

 

Minister of Petroleum delivered an inaugural speech where he clarified the strategy of his Ministry as regards the optimum economic use of natural gas, which is based upon striking a balance between the domestic demand and exports, and that the priority is given to fulfil the domestic needs of the various economic sectors. He said that there was a strategy for expanding the usage of natural gas in the domestic market and industrial activities.

 

 He also explained that the petrochemical industry was witnessing a remarkable progress as it magnified the gas usage in the framework of the national plan for petrochemicals, in addition to the other alternatives for exporting gas. Furthermore, the Minister pointed out that the projects of Mubarak Compound for Gas and Petrochemicals, which President Mubarak had recently inaugurated, were the record projects as to implementation, performance, cost, technology used and revenues.