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Analysis: Egyptian LNG exports more than double in 2019 to 4.8 Bcm despite autumn lull

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Analysis: Egyptian LNG exports more than double in 2019 to 4.8 Bcm despite autumn lull

  • Author
  • Stuart Elliott
  • Editor
  • Alisdair Bowles
  • Commodity
  • Natural Gas

London — Egyptian LNG exports more than doubled year on year in 2019 to 4.8 Bcm of gas equivalent, data from S&P Global Platts Analytics showed Tuesday, despite a slowdown in supplies over the autumn.

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Total exports last year from Egypt's only operational LNG plant -- the 7.2 million mt/year (10 Bcm/year) Shell-operated Idku facility -- increased by 151% compared with the 1.9 Bcm supplied in 2018.

A total of 50 cargoes were exported from Idku last year compared with just 20 cargoes in 2018.

The sharp rise comes despite no cargoes being exported from Idku in September and a drop in supplies in October.

That coincided with a fall in the JKM spot Asian LNG price, which slumped to just $4.10/MMBtu in August, and reports of maintenance at the plant.

More gas has been made available to Idku over 2019 as a whole, however, as domestic Egyptian production ramps up, mostly thanks to increased gas output from the Eni-operated supergiant Zohr field.

Egypt is now easily able to meet domestic demand, and with imports from Israel imminent, Egypt will have plenty of gas available for export as LNG.

Samer Mosis, leading LNG analyst with S&P Global Platts Analytics, said Egypt is having now to manage its new role as an oversupplied, emerging gas hub.

"Egypt's state gas company, EGAS, faces a relatively high breakeven cost which has led it to demonstrate some price sensitivity," Mosis said.

"The breadth of production growth domestically, though, means that exports could easily meet all of Idku's capacity through the end of winter," he said, adding though that lower summer demand could eat into Egypt's total export levels.


Egypt currently produces an estimated 7 Bcf/d -- of which Zohr accounts for more than a third -- and production is expected to rise to 7.5 Bcf/d when Zohr output rises to 3.2 Bcf/d in 2020.

Production of 7.5 Bcf/d is the equivalent of 77 Bcm/year -- meaning Egypt has around 15 Bcm/year of surplus gas for the export market once it has met its domestic consumption needs.

Even with Idku running at full capacity, that means there would still be surplus gas for which Egypt would need to find a home.

Egypt's other LNG export plant, the 5 million mt/year facility at Damietta, remains idled but could resume operations in 2020.

Damietta -- which is operated by Union Fenosa Gas (UFG), a 50-50 joint venture between Eni and Spain's Naturgy -- has been out of action since 2012 after feedgas to the plant was diverted for use on the domestic market.

UFG filed a lawsuit against Egypt in 2014 seeking compensation, and commercial negotiations with the Egyptian government regained momentum in 2018 after a World Bank arbitration panel ordered Egypt to pay $2 billion in compensation.

An Eni spokesman said Tuesday that negotiations on restarting the plant were ongoing.

"We are working with all parties to get Damietta back in operation as soon as possible," the spokesman said.


Egypt's LNG customers remain diverse. Since the start of 2016, India and Pakistan have been the two biggest importers of Egyptian LNG with nine cargoes each.

Europe is also a popular destination given its proximity to Egypt, with France, Italy and Turkey importing eight cargoes each in the period 2016-2019.

Other key buyers include Singapore (eight cargoes), China (seven), Japan (six), and South Korea and Greece (five each).

Egypt was traditionally a fairly stable exporter of both LNG and pipeline gas before its domestic output slumped due to a slowdown in investment following the Arab Spring in 2011.

It began importing LNG in April 2015 to fill a growing supply-demand gap, but halted imports in 2018 as Zohr came online.

--Stuart Elliott,

--Edited by Alisdair Bowles,