Newsletter subscribe

Oil & Gas

New ownership agreement for Damietta LNG plant to be signed next month

Posted: February 24, 2021 at 1:58 pm   /   by   /   comments (0)

Dispute that put Damietta LNG in a coma to end next month: It seems possible that the plant will be making regular scheduled shipments starting from next month, as a final agreement to establish a new ownership structure for the Damietta LNG plant is due to be finalized on 15 March, Oil Ministry spokesperson Hamdy Abdel Aziz tells us. The move would put the final nail in the coffin of a dispute that has delayed operations at the plant for eight years. The plant was brought back to life recently, a few months after operator Eni reached an agreement with the government and Spain’s Naturgy. This will see Naturgy exit Union Fenosa Gas (UFG) — a 50/50 JV with Eni that owns 80% of the facility. The first shipment left earlier this week to Bangladesh carrying 60k tonnes of LNG on a carrier bearing the flag of the Marshall Islands, cabinet said on Sunday.

Who will own what? Eni will get 50% of the plant, state-owned EGAS will hold 40%, and EGPC the remaining 10%. Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights, a statement from Eni in December said.

The dispute’s origins: UFG filed a case against Egypt at the World Bank’s International Centre for Settlement of Investment Disputes for disruption to gas flows to the liquefaction plant. The arbitrator decided the government should pay USD 2 bn in settlements to the foreign JV.

Damietta LNG plant to make its next shipment next week: Damietta will run a series of trial shipments to test the health of the facility, with the next shipment expected to leave our ports and make its way, likely to Europe, Aziz told us, confirming reports in the local press today. He did not reveal just how much gas will be shipped out.