Italian firm to start exploring new Egyptian gas field 'in two months'

Italian energy company ENI will begin exploratory drilling within two months in a gas field off the Egyptian coast reported to be the largest ever found in the Mediterranean, an Egyptian oil ministry spokesperson told the Reuters news agency on Thursday.

Reports earlier this week said the Noor field in the North Sinai Shorouk concession was triple the size of the Zohr field, found by ENI in 2015, which is expected to transform Egypt from a net importer to a net exporter of gas by early next year.

Eni has not yet said what gas reserves it expects to find in the Noor field, but Hamdi Abel Aziz told Reuters the exploratory drilling would help to determine that.

The new discovery would cement Egypt’s plans to become a regional gas hub, only a couple of years after energy supply shortages made blackouts a daily experience for many Egyptians.

It will also raise doubts over a deal announced in February that would see $15bn worth of Israeli gas exported to Egypt over the next decade.

Bottom line: 'Plenty of gas'

Egypt’s Petroleum Minister Tarek El-Molla told Bloomberg late last week that the country might stop importing liquefied natural gas (LNG) by the end of the year, but did not mention any new discoveries.

"The exports of Zohr gas field, as well as other gas fields' production, will start early next year," El-Molla said. "I don’t think there will be more tenders. I think this is it. Local production should cover our needs."

Reports of the find saw Israeli energy stocks fall as analysts said the $15bn deal between Israeli company Delek Drilling and Texas-based Noble Energy to supply Israeli gas to Egyptian company Dolphinus Holdings looks shaky.

Earlier this month, Delek announced that it would hold a special shareholders' meeting on 1 July to decide whether to invest in East Mediterranean Gas (EMG) which operates an underwater pipeline that runs between Israel and Egypt. Securing a transportation route had been seen as one obstacle holding up the deal.

“Bottom line is Egypt will have plenty of gas for its own needs, and probably for export,” David Butter, an associate fellow in the Middle East and North Africa programme at Chatham House, told Middle East Eye on Wednesday.

“Anyone wanting to sell into the market will have to compete on price, which would appear to be a tall order."

An ENI spokesman on Wednesday told Middle East Eye the company never comments on rumour or speculation.