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Egypt's LNG exports at full capacity after gas price surge

Egypt's natural gas exports are at full capacity of about 1.6 Bft3d from its two natural gas liquefaction terminals as it seeks to benefit from a surge in international gas prices, Petroleum Minister Tarek El Molla said on Thursday. 

Egypt's natural gas production is stable, currently ranging between 6.5 and 7 Bft3d, he told Reuters.

Exports are expected to fall to 1 Bft3d in April due to regular seasonal fluctuations, Molla added, as domestic consumption starts increasing into the summer.

Gas and oil are a crucial source of foreign investment and dollar revenues for Egypt, which has been trying to position itself as an energy hub ever since the 2015 discovery of the giant offshore Zohr field.

It has also worked to boost regional gas trade by hosting the East Mediterranean Gas Forum, set up to promote gas exports from the region.

Molla did not say what level LNG exports had risen from, but Egypt has expanded exports after ending a long shutdown at the Damietta liquefaction plant in February.

"Egyptian gas has played a role in securing Europe's energy needs," Molla told Reuters in separate comments at an EMGF conference last week. "The liquefaction units are now operating at full capacity as we try to maximize our natural gas exports in light of the rise in international gas prices."

Egypt currently imports around 450 MMft3d from Israel for re-export, a figure that Molla said it seeks to raise to 600-650 MMft3d by the first quarter of 2022.

Further increases would require the construction of a new onshore pipeline, which could be installed in 2024-25, Molla said. Last week, Egypt and Israel signed a MOU to increase Israeli natural gas supplies.

Egypt is also planning 60-65 MMft3d of exports to Lebanon under a U.S. backed plan to ease Lebanon's power crisis. Molla said the start of exports had been pushed back to after Christmas and this was now expected at the beginning of 2022.

Egypt recently made amendments to crude oil extraction agreements, which Molla said could result in an increase of about 100,000 bpd, from current production of 575,000 bpd.

The amendments could result in $5 B in new investment over the next three years, while $6 B in foreign investment in the energy sector is expected during Egypt's current fiscal year, which ends in June, Molla said.

Egypt's fuel product subsidy bill increased by 76% during the first quarter of the current fiscal year, reaching 6.9 B Egyptian pounds ($440.61 MM), led by an increase in the cost of butane subsidies, Molla added. 

(Reporting by Ahmed Ismail, Writing by Sarah El Safty, Editing by Aidan Lewis and Jane Merriman) 


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