NATURAL GAS EGYPT'S MARKET OVERVIEW - UNECE
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
EGYPT’S NATURAL GAS MARKET OVERVIEW
Egypt’s Gas Industry Milestones
Gas
Regulator
1st LNG
import
1st FSRU
Tender
1st Gas
Export
Private
LDC
1st CNG
Vehicle
1st
Residential
1st customer
Industrial
1st gas customer
Discovery
1967 1976 1981 1992 1996 2003 2012 2015 2017
2
Historical and Forecast Gas Production (by area)
90 BCM/yr
80
70
60
50
40
30
20
10
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Nooros Fields West Delta Deep Marine West Nile Delta Project
Zohr Total production
3
Zohr Gas Discovery
• The Largest gas discovery in the Mediterranean.
• One of the largest gas discoveries in The World.
• 30+ TCF of GAS in place
• 1.5km water depth , 100 km2 acreage, 220km from shore
• Significant potential in adjacent Blocks
4
LNG imports act as bridge for next upstream production
Due to the ongoing energy shortage
Gas balance (BCM) Egypt began importing LNG in 2015
2.8
A 500 mmcfd capacity Floating Storage and
2.8
Regasification Unit (FSRU) was installed
10.3 at the Port of Sokhna on the Red Sea and multi-
10 23.6 39.4 year deals have been concluded with LNG
15.3 sellers.
3.6 5 43.7
10.3 48
0.3 49.3
A second FSRU, with a capacity of 750 mmcfd,
0.4
48.3 was commissioned in November 2015 alongside
45.5
61.3 63 61.9 the first at Sokhna
57
48.5 44 47 46 45.1
41.6
36.1 In August 2015, Eni announced the Zohr
28.9
23.9 discovery, a new play opening find with an
18 14.7 12
estimated 21.5tcf of recoverable gas reserves.
-7.7 -1.4 -0.8 -0.7 -0.7 -0.7 -0.7 -4.8 -8.7 -10.1 -11.5 With a fast track development planned, Zohr will
-10.4 -9.4 -3.7 -2.9
help to reduce the need for costlier LNG imports.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 This new source of gas will help Egypt to lower its
cost of supply and, if followed by further
Production online New gas production LNG LNG discoveries, could see Egypt return to a period of
in 2015 (2015) imports exports energy self sufficiency
Source: Woodmac – Seek Permission, OIES
5
Egypt as the new Energy Hub in the Mediterranean
• Major recent huge gas discoveries (Zohr)
• Oil & Gas infrastructure (LNG Facilities, Pipelines)
• Centered looking in the middle of resource-rich countries and major energy
consumers, as well as availability of major Int. Maritime Trade lines.
ZOHR
Damietta LNG
Idku LNG EMG P/L
FAJR P/L
FSRU
East Gas P/L
FSRU AQABA
6
Gas fuels economic growth
Falling domestic production
Gas & LNG LNG helps growth in the Egyptian steel Steel production with greater than anticipated
imports (BCM) industry ‘000tn/yr
demand led to costly
70 8,000
fuel and power shortages in Egypt
7,000
60 Rapidly deployed FSRUs import
6,000 LNG until new fields were in
50 production
5,000
40
This allowed $457mn steel to
4,000
30
be exported, using idle
3,000 capacity, keeping the lights on
LNG imports enable with significant financial and
20 steel plants to continue 2,000 environmental saving vs
to operate
10 1,000 alternative fuels
0 0
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Steel production Gas LNG
Ktn/yr production imports Source: World Steel Association, BP Statistical Review, GIIGNL
LNG Reports
7
Gas Value Chain in Egypt
Gas Usages
Power
Fertilizers
Industry
Gas Grid
Local Distribution CNG
Gas Delivery Domestic
8
Natural Gas Supply vs. Demand vs. Consumption
Egypt consumption of Natural gas is increasing by higher rate than worldwide consumption Despite
the drop of production in the last four years, turning Egypt from being a gas exporter to gas importer
With the new discovery of Zohr, net gas imports are expected to be covered by local production.
Going forward, Egypt will witness a growth in natural gas production from “supergiant” Zohr.
Producing currently 0.349 BCF per day, to reach 1 BCF per day in June and 2.7 BCF by end of 2019.
Additionally importation through gas el sharq will start beginning of 2019.
9
National Oil, Gas Grid & Facilities
Simian/ sienna
Theth
Denise
Med. South
Robi Raven East Fields
Saffaire Taurt
Tarouse Scrab/ Akhen
safron Baltem Temsah
Abu sir El-Max Hap’y North
32“- 160 Km North Port Said Bardwell
North Idku
King Roseta 24“- 50 Km
LNG El Gamil Port Fouad Theka
West Abu Qir
24“- 26 Km
Qara Damietta Flower
Naf UGDC El Sheikh
El obyed Helm Zowayed
Abu Qir Desouk Abu Madi 22“- 40 Km Port said North Sinai Arish &
Salam South Wastani El masaid
Belquas South El Fayroz
18“- 12 Km 30“- 26 Km Manzala East Gas
Talkha
Shams Abu Hommos
12“- 40 Km 42“- 40 Km
16“- 9 Km South El
South Aum Barkah West South
Sedi Krier Shabshir Mansoura El Tena
Tarek Ameriya El-Tina East Port Said P.S & Ind. Area
Intergene
24“- 14 Km
Mahmudiya Tanta
32“- 85 Km Sinai Cement &
28“- 86 Km 24“- 215 Km 36“- 196 Km industrial Area
24“- 26 Km Ameriya
El Qasr 36“- 264 Km
Nubariya
Ameriya Borg 24“- 26 Km Qusina 10 BCMY
South Cement Elarab Sadat Banha Abu sultan
Meleha Deep Dab’aa 32“- 75 Km
Neag 6 October
12“- 14 Km
Bed - 2 Cairo 24“- 25 Km
El Fayoum Offtake
Bed - 3 Suez
Abu Sannan 265 Km 24“- Mostorud I-A
Bed - 1 A’youn
Dahshour Tebbin
Vegas fields Moussa
A/GH
Karoun Fayoum 22“- 87 Km Jordan
24“- 10 Km
El Sokhna
30“- 28 Km Za’frana A/R
Koraymat 16“- 192 Km Suco
Belayim 20“- 660 Km
16“- 256 Km
Beni Suef
Ras Bakr October Abu Rudis
• Existing . PL Ramadan
Esma 2
• Under cons. PL El Menia Esma 8
Unit 108
• Future. PL (5 Years) Unit 103 Badri
Morgan
• Gas fields Ras Shukir Unit 104
• Future Gas Fields Shoab Ali
20“- 40 Km
Suco
• Facilities New Assuit
Agiba Sharm El Shikh
• Distribution Stations Deshna Zeit bay Sea bird
Assuit
• Power stations Qena
• Industrial Areas Quos
Hurgada
• Consumer Luxor
• Distribution Co. Aswan
• Export West
Aswan Kima 10
SafagaNatural Gas Consumption in numbers (till June 2018)
» 58 Power Generation plants
» 14 Local Distribution companies
» More than 2,491 Industrial Consumer
» 415 brick kilns
» 8.8 Million Residential Customer
» More than 18,776 Commercial customer
» 7486 Bakeries
» 243,688 vehicles converted to CNG
» More than 70 conversion centers
» 187 CNG stations
Source: EGAS annual report 2018
11Gas to end users
Residential
Fuels substitution & conversion
• Apartments
• Houses Water heating Space heating
• Villas Cooking Steam Generation
Furnaces Manufacturing Process Heat
Commercial Refrigeration Gas-fired Air-conditioning
• Hospitals
• Schools and Universities
• Offices
• Restaurants
• Bakeries etc. Natural gas will replace:
Industrial • Diesel for water and central heating
• Factories • LPG for heating and cooking
Medium Heavy
- Chemical - Steel • Fuel oil and diesel for industrial
- Paint - Cement
- Textile - Fertilizer
applications
- Food
• Gasoline in cars
12Development of the Egyptian Gas Distribution Sector
13Gas Distribution – Deregulation Development
The Main National Grid / Trunk line is constructed & Operated by GASCO (on behalf of EGAS)
Everything down stream of the Pressure Reduction Station is within the cost of the LDC connection rate. Payments made “per converted customer”
14Development of the Egyptian Gas Distribution Sector
From ONE state monopoly …
… to 9 private sectors & 5 state-owned LDCs/EPCs
8.8 Million customers connected Ongoing Distribution Activities
Over 1 bn $ of Foreign & Local investment
Regulator
16 Egyptian Governorates covered by Gas networks
600 MM $ /Year Saved in subsidies P.R.S
Regulator
Enhanced HSE Standards
Introducing new technologies
Attracting the Multi-Nationals
Off Take
Social Investment – Jobs/Employment - Environmental
Provide a better quality of life for Egypt’s citizens Typical Downstream Gas Network
15Compressed Natural Gas “CNG” Business Model
Well developed gas grid;
The end consumer price and margin are
regulated;
Conversion is undertaken only by the CNG
companies;
Local codes in place governing all technical
and HSE aspects;
Conversion loans were offered through CNG
companies till mid. 2003, now through
commercial banks;
The Government is the sole supplier of the
gas, and the sole owner of the supply grid
nationwide
16Deregulation Development – Egypt’s CNG Market
Phase I Phase II Phase III
1992 - 1996 1996 - 2002 2002 - now
Pilot Project National Project Expansion
2 Pilot Projects Monopoly 4 Private
With the assistance 2 State-Owned “NGVs”
Of 2 IOCs (JV with IOCs) (Local & Int.)
17Market based Incentives: CNG Smart Card
Mechanism
Financing 100% of cost of conversion through
commercial lending on a debit card to be
presented at fueling stations by converted
vehicles’ drivers
Increase
No. of Vehicles Converted
18
18Gas Sector Governance
The Egyptian Government has approved a new Gas Law.
• The new Gas Law, paves the way for a substantial reform of the gas sector.
• The law mandates the creation of a new independent gas regulator.
• Offering an opportunity to the private sector to enter and compete in wholesale
downstream market segments, the existing shadow regulator finalized the gas
transmission codes, gas transmission tariff, which will be published soon.
19Lessons from Egypt - Making it work
Supply and infrastructure
Role of private sector
Full involvement of investors & distribution companies
Capital intensive industry
Slow but steady returns
Involvement in the whole supply chain
Consumer education
Support from international institutions
Commitment from international institutions
Financing collective infrastructures
Support for micro-credits
Exchange of good practices
Regulations
developing adequate framework using experience from well established and
structured market
opting for a cylinder deposit system
banning cross-filling
establishing a licensing system
20Lessons from Egypt - Making it work
Access for poorer classes and implication of taxes
developing an efficient network
financing solutions such as micro-credit
eliminate taxation of LPG and cylinders (import duties and VAT)
harmonizing the tax system (in case partial taxation is maintained)
Support from governments
Stability of the political and legal systems
Rules governing trade and investment
Regulations concerning industry operating and safety standards
Involvement in fair tax / duty treatment
Awareness & Consumer’s Adherence
Openness to change
education campaigns
(schools, associations, role of village heads)
- safety
- applications
advertising campaigns by marketers
21Policy enablers, blockers and opportunities
Enablers
•Strong multilateral support, FDI
•Subsidy regime (initially)
•Clear cost recovery model for LDCs
•Free trade zones
Blockers
•Cost recovery mechanism for upstream, power sector
•Subsidy regime (later)
•Regulatory environment
•Customer payback
•Security of supply for large industry
•Connection fees
•Monopsony buyer
Opportunities
•Regional gas hub
•Modernisation programme (subsidy phase out)
•Regulatory reforms and capacity building (direct sales)
•Efficiency opportunities
22THANK YOU
2 Simon Bolivar Sq, Garden City , 8th floor
Tel: (202) 2796 1494 Fax: (202) 27962821
www.taqa.com.eg
23You can also read
