Talks about reaching a new agreement to allow the restart of Egypt’s Damietta LNG export facility have resumed, according to a spokesperson with project partner Eni on Friday. Eni and Naturgy 50/50 joint venture,Union Fenosa Gas (UFG), is the operator of the facility. In February, project partners agreed that Eni (50%) and state-owned gas company EGAS (30%) will own UFG’s 80% share in Damietta.
This means that Eni, EGAS, and state-owned oil company EGPC would have owned 50%, 40%, and 10% share, respectively, in the facility. It would have also meant that Spain’s Naturgy would withdraw from the project in exchange for $600 million and most of UFG’s assets beyond Egypt. However, the deal fell through in April as some terms were not fulfilled. The termination of the February deal was partly triggered by the coronavirus pandemic which prevented workers from accessing the plant and falling LNG prices which devalued the asset.
Damietta LNG export plant has been idle since 2012. The export resumption from the facility is expected to boost Egypt’s revenue. Egypt’s current LNG exports come only from the 7.2 million tons/year Idku facility operated by Shell. However, shipments fell to a near-total collapse due to weak prices. However, North Asian spot prices have been recovering, and industry sources said that Egyptians were interested in speeding up the talks.
