Egypt Looks to Expand Oil and Gas Production

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The Egyptian Ministry of Petroleum announced strategic goals that will bolster Egypt's oil and gas reserves, increase production, help satisfy local demand for petroleum products and gas, contribute to the Egyptian economy, realize export projects for gas and petrochemicals, develop human resources, create new job opportunities, and adopt new technologies.

To achieve these goals, the Ministry of Petroleum has restructured the oil sector, establishing specialized entities for oil, gas and petrochemicals. The restructuring included establishing three new holding companies in addition to the Egyptian General Petroleum Corporation: the Egyptian Natural Gas Holding Company, the Egyptian Petrochemicals Holding Company and Ganoub El Wadi Petroleum Holding Company.

These organizations operate separately from each other; each one has its own financial position and balance sheets. However, they work under the umbrella of the Egyptian Ministry of Petroleum, which helps coordinate the agencies to achieve the strategic goals.

The Petroleum sector in Egypt has established many gas-based projects throughout the country. Although many of these projects have been online for years, several have room for upgrades and expansions to help increase production capacity.

The Mubarak petrochemicals and gas complex was established in Damietta in May 2005 as the first project aiming at exporting liquefied natural gas (LNG). Initial construction allowed for a production capacity of 7.65 billion cubic meters per year and required a total investment of $1.3 billion. This project can accommodate three additional liquefaction trains if the requisite natural gas is supplied.

The LNG project in Idku currently comprises two liquefaction trains at a capacity of 10 billion cubic meter per year to export LNG to Europe. Construction of the facility required an investment of $1.12 billion, and the location of the project can accommodate an additional six liquefaction trains.

United Gas Derivatives Company (Cairo, Egypt) extraction complex receives natural gas produced from northeast Egypt. The facility can produce 300,000 tons of LNG to meet domestic needs and 280,000 tons of propane to be exported.

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