Eni, partners hail Egyptian gas discovery production test

London — Italy's Eni said July 28 it had successfully tested its latest shallow-water Egyptian gas discovery, which is likely to be relatively easy to commercialize, as companies remain upbeat about demand for East Mediterranean gas.

Eni had announced in early July the discovery at the Bashrush prospect of the North El Hammad license, which lies offshore the Nile Delta, west of the producing Nooros and Baltim South West fields. All three are part of the Nile Delta Abu Madi formation.

During testing the prospect delivered up to 32 MMcf/d of gas, Eni and project partner Total said. "The well deliverability in production configuration is estimated at up to 100 MMcf/d of gas and 800 b/d of condensate," Eni said in a statement.

Egypt's shallow-water coastal finds have not been on the scale of the 3 Tcf Zohr field, in which Eni is also the lead partner, but have the advantage of relative ease of development. Eni has already said it plans another exploration well this year in the Greater Nooros area.

"Eni, together with its partners BP and Total and in coordination with Egyptian Natural Gas Holding Company, will continue screening the development options of Bashrush, with the aim of fast-tracking production through synergies with the area's existing infrastructures," it said.

Total added the well had encountered 102 meters net gas pay in "high-quality sandstones of the Abu Madi formation."

Total's senior vice president for exploration, Kevin McLachlan, said: "These results support our strategy to allocate a significant share of our exploration budget to the search of hydrocarbons in the vicinity of existing infrastructures...These resources have low development costs since they can rapidly be tied-in and put into production."

Total holds a 25% stake in the North El Hammad contractor partnership alongside Eni and BP, each with 37.5%.

Egypt is regarded as having the best prospects as an LNG export hub for the East Mediterranean region, including also Israel and potentially Cyprus, despite exports grinding to a halt during this year's collapse in global commodity markets.

Chevron's purchase of Houston-based Noble Energy, announced last week, was widely seen as driven by Noble's Israeli and Cypriot gas projects, and Chevron CEO Mike Wirth said that "demand for gas in the Eastern Med region as well as more broadly continues to grow."

"It's a fuel that will continue to displace coal for power generation and as economies grow in that region, and beyond, we think the demand will continue to support further development," Wirth said.