THE BREAKDOWN
- Eni, Italy’s State-controlled energy major, signed a deal with Egypt to boost LNG shipments to Europe
- The deal is part of a broader European shift away from Russian imports
- It will also result in increased gas production and additional explorations
- The company announced new oil and gas discoveries in an ever-increasingly promising area
The Italian energy major at the centre of Italy’s efforts to pivot away from Russian gas, Eni, is sending waves across the industry. On Wednesday, the company signed a deal to boost gas production in Egypt and increase liquefied natural gas (LNG) supplies to Europe.
The State-controlled company has shaken hands with the Egyptian Natural Gas Holding Company (EGAS) to step up production and exploration, both in existing and new gas fields.
According to Eni, the deal could send 3 billion cubic metres (bcm) of LNG to European shores by year’s end. The energy major also holds a stake in the recently re-opened Egyptian LNG plant in Damietta, which can liquefy 7.5 bcm a year.
The additional volumes are part of the 20 extra bcm that Italy managed to reserve for the upcoming months (the amount is slated to increase even more in the upcoming years) as the country leverages its gas duct connections and ties with African countries to increase gas flow to Europe.
That same day, Eni also announced new oil and gas discoveries in Egypt’s Western Desert, specifically the concession of Meleiha. The company expects an extra output of 8,500 barrels a day, a limited but welcome addition to the 360,000 baseline production as Europe braces for the energy crunch to extend into 2023.
Explorations in the oil-rich area in 2021 and 2022 currently sit at a 75% success rate. In a statement, Eni said that other ongoing explorations show promise. The company is increasingly coupling oil- and gas-related activities with decarbonising initiatives, including the development of renewable energy plants, in Egypt as elsewhere in Northern Africa.
