The decision whether or not to proceed with an expansion of the Liquefied Natural Gas (LNG) plant in the Egyptian port Damietta is expected to be made by the partners later this year or early in 2008, the Middle East Economic Survey reported Monday.
The Cyprus-based weekly publication said that discussions had been ongoing between the parties, which would be able to focus on the planned development of a second train once the project financing for Train 1 has been completed.
Although the memorandum of understanding (MOU) to build the second 5-million-tons-a-year train at Damietta was signed over two years ago by the Italian Eni's local subsidiary International Egyptian Oil Company (IEOC), BP and the Egyptian Natural Gas Holding Company (EGAS), implementation of the expansion has been delayed by complications over securing committed gas supplies.
Forecasts of a buoyant LNG market and the economies of scale to be gained from adding extra trains make it in the partners' interest to secure the additional 735 million cubic feet daily of feed gas that is required, the MEES report said.
But development of any further trains or new LNG projects will be driven by the capability of EGAS and other upstream producers to demonstrate gas is available, while Egypt is also becoming more confident of its role as a gas exporter and the prices it can achieve in the international markets, whether through pipeline exports or LNG.
(Deutsche Presse-Agentur, 11/06/2007)