The Integration of the Natural Gas Market in the Mashreq and connection to Europe

Euro-Mediterranean Ministerial conference on Energy Limasol-Cyprus 17th of December 2007

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Energy as a driving force for Integration

The European Coal & Steel Treaty has launched the European community integration in 1952, and was very largely a Peace project between France and Germany and provided a model for promoting social change through a new form of co-operation at European level. Energy was thus at the heart of the original idea of European integration and still covers a crucial role in the European policy today.
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Integration of the Euro-Mashreq Gas Market

In the same manner, The establishment of an interconnected Mashreq gas market, that could be further extended to Europe, can play an important role as a vehicle to enhance the security and safety of energy supplies, and in the same time promote regional cooperation and integration.
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Features of the Euro Mashreq Gas Market

Turkey is the bridge to Europe ,There are excellent market opportunities for AGP Syria has Potential to play a role in export, and gas transit.

Lebanon: a Gas importer Israel: a Gas importer Palestine: a Gas importer

Turkey
Iraq Iraq: Large gas reserves. Akkas Field offers fast export potential Located close to Syrian border it could utilise existing gas processing plant and pipelines to provide access to AGP

Egypt: Adequate gas reserves for domestic demand, regional supply and export to Europe.

Jordan: a Gas importing and transit country

Features of the Mashreq Gas Market

Euro-Mashreq gas Cooperation Center

To contribute to the integration of the gas markets of Egypt, Jordan, Lebanon & Syria in view of creating a regional internal gas market to be integrated with the EU Internal Gas Market

Timing Budget Location Mechanism Approach

33 months, from 1st February 2006 to 31st October 2008 7 million, of which EU grant 6 million, beneficiary countries 1 million in kind contributions Egypt, Jordan, Lebanon, Syria The Euro-Arab Mashreq Gas Co-operation Centre, headquartered in Damascus Gas Master Plan, Legislation/Regulation, Know-How Transfer
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Overview of Egypts Gas Industry

Overview of Egypts Oil & Gas Industry

Egypt is one of the world pioneers to start oil activities. First discovery of crude oil in Egypt in recent history was in 1868. The first oil well drilled in Egypt in 1886, and the first commercial production started in 1909. Morgan Field, the first major oil field in Egypt, was discovered by Amoco in 1966. The first gas field Abu-Madi was developed in 1975.
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SERPENT SCARAB SAFFRON SAPPHIRE SAURUS-1 HJ-1 K-1X

SOLAR- 1 SEMIAN TEMSAH TENNIN SIENNA N. BALTIM TERSA DENES SETH HAPY N. ROSETTA E. BALTIM S. SQUOIA S. BALTIM ROSETTA NIDCO EL QARAA SETI RENGA SIGAN WAKAR / KERSH TUNA BARACODA BARBONI FAHD

ROBY-1 L-1X EL MAX-1 ABU SIR - 1

ZARAF-1 ASSAD

AKHEN KARAWAN MYAS EL WASTANI ASFOUR ABU SEIF NOURAS

SEMAN OCTOPUS TAO KAMOSE THEKAH

EL BAHIG

N. ABU QIR N. IDKU W. ABU QIR ABU QIR

KAROUS WASTANI EAST DARFEEL

[Link] FOUAD PORT FOUAD

EL KING

ABU MADI
Aqiq
DESUQ KHALALA

SHERBEEN S. BILQAS GELGEL MANSOURIYA-1

FAYROUZ

QANTARA

More than 1 TCF (11) More than TCF (21) Less than TCF (45)

S. BATRA ABU MONKAR KABER MANSOURA S-1 EAST DELTA-S

Egypt Proven Gas Reserves

(TCF)
80 70 60 50 40 30 20 10 0
8.1 12.3 24.2 44.9 73.0

1986

1989

1992

1995

1998

2001

2004

2007 10

10

Yet to Find (YTF) Deepwater Potential Only

60,000 50,000 Reserves (mmboe) 40,000 30,000 20,000 10,000 0 -10,000 Cote d'Ivoire Trinidad & Tobago Equatorial G uinea US Gulf of Mexico Mozambique Egypt Mexico Congo India Indonesia Mauritania Malaysia Canada Nigeria Brazil UK Philippines Angola Australia Norway Italy

Assuming all YTF discoveries are gas, this equates to ~ 90 tcf

Yet-to-Find Reserves Remaining Reserves Produced Reserves

11

Production of Crude oil, Condensate, Natural Gas & Derivatives Million Tons 2000/2001 2007/2008
90 80 70 60 50 40 30 20 10 0
01/00 02/01 03/02 04/03 05/04 06/05 07/06 08/07
plan12

84.0

70.9 55.1
19.6

73.3
47.9

55.4
20.6

57.3
22.5

58.5
24.7

58.7
39.6 26.7 42.4

35.5

34.8

34.8

33.8

32.0

31.3

30.9

36.1

crude oil & condensates

Natural Gas& Derivatives

Diversified Natural Gas Market

13

13

Baltem

ELObyed Salam South Um Barakh

Matruh

Abu Sair

Alexandria
King
Town Gas

West Abu Qir

42 150 k.m

Abu Qir

South Belkas 30 26 k.m 12 40 k.m Egypt Gas

Abu Hommos

Batra
Talkha

Naf

Abu Madi South Manzalla 22 40 k.m 42 40 k.m 42 40 k.m South Mansora

G D

Tarek

El Kasr

Vegas Alkaram

Qusina

EL Shabab National Gas Abu Zabl

16 k.m 114

24 26 k.m

Mleha Deeps Neag Shell Bed-2 Bed-3 Bed-1

W.D.G. Complex
24 26 k.m

Nobaria P.S
32

South El Dabaa

24

k.m 81 -1

Ameriya Cement

12 14 k.m

Borg Elarab

32 70 km 20 0k .m El Sadat Town Gas Natgas

Banha
Egypt Gas

10 th of Ramadan Natgas

Abu Soltan

Abu Soultan P.S

Fajr Ga s P ipe

Intergen P.S

Natgas

Tanta

Transgas
28

36 - 33 k.m Town Gas 16 165 k.m

24 45 k.m Mahmudya p.s 18/16 13km Egypt Gas 12 14.5km 24 15km .m 0k 42 65km Ameriya 4 24 Natgas

24 125 k.m

Sinai Cement & Ind. Area

line
E as ip as P t G

Shams

34

Bahig

EL Max

Natgas Sedi Kreir P.S

Shabshir 28 40 k.m

El-Tina

Bardwell Port Fouad Port Said Helm P.S Town Flower N. Sinai Gas Fayroz 36 196 k.m Romana

Arish P.S

ElSheikh Zowayed

- 2 34 k.m

28 16 k.m

k.m 167 32 32 60 k.m

78 36

24 - 45 k.m

Damietta

Hapy

N. Port Said

Theka

ar in

East gas

24 50 k.m

P/ L

North Eidku

Wastany 32 165 k.m Roseta Burullus Scrab & Safron North Alex. ElQara

Taurt

Akhen Temsah

EM

L N G Fenosa

Repco Gas

36 - 393 k.m

Shapas Denies

Rehab ps Samra ps

86 m k.

Abu El Ghradik

Existing. Existing. P/L P/L Under Under Cons. Cons. P/L P/L Under Under Study. Study. P/L P/L Existing Existing Comp. Comp. Station Station Under Under Const. Const. Comp. Comp. St. St. Future Future Comp. Comp. Station Station Gas Gas Fields Fields Future Future Gas Gas Fields Fields Facilities Facilities Distribution Distribution Station Station Power Power Station Station Industrial Industrial Area Area Consumer Consumer Distribution Distribution Co. Co. Off Off Take Take Export Export

31

18 - 2

12 k.m

24

Natgas

Egypt Gas 6 October

30

145

Cairo

Town Gas Mostorud I. A

32 110 k.m

k.m

Suez
City Gas

elin

/20 24

42 80 km

24 25 k.m

Ayoun Moussa

Fayum Gas off take

Abu Sannan

24 - 265 k.m

Dahshour

36 - 264 k.m

Aqaba
Aqaba P.S

65 k.m

Tebbin

Town Gas

Sinai Manganez

Taba

Qarun

Fayum Gas

22 87 k.m Koraymat

Sokhna 24 10 k.m
Suco Fields Abu Rudies P.S PPC

36 88 k.m

18 162 k.m
Zafrana

Nuweiba 20 - 208 k.m

Nile Vally off take

30 28 k.m Beni Suef 32 150 k.m New Minya

16 192 k.m 16 256 k.m

Ras Bakr

Petrobel

Dahab

Minya

Unit 103 Gupco Ras Ghareb

City Gas

Esma 2

Ramadan Esma 8 Badri Morgan Suco Agiba Oil Gulf 20 - 40 k.m

Abu Qurqus

16 75 k.m
Ras Shukier Unit 104 Gupco

Sharm Elshekh

32 136 k.m New Assiut

Shoab Ali Sea Bird

Assiut

24 127 k.m
Hurghada

32 125 k.m

24 48 k.m
Safaga

Sohag

Dar El-Salam

20 38 k.m
Safaga New P.S

Total Length 16.5 Thousand Km

Gerga 30 147 k.m Deshna

Nag hamady

Quena

Queft Kuos

Luxor
30 240 k.m

Esna

Edfo

Kom Ombo Aswan

14 14

Nov. 2007

KIMA

Damietta LNG Complex

z Investments z Markets z Shareholders z Capacity z Start-Up z General Contractor z Subcontractor 1300 MMUS$ (including LNG Tankers) Spain/Italy Union Fenosa Gas EGAS/EGPC 7.5 BCM/Year Jan. 2005 Kellogg / Brown&Root Enppi/Petrojet
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80% 20%

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Idku LNG Complex

z Investments z Markets z Shareholders 1900 MMUS$ (2 Trains) France/ USA/Italy BG 35.5% Petronas 35.5 EGAS/EGPC 24% Gas De France 5% 10.0 BCM/Year May-2005 (1st Train) Sep-2005 (2nd Train)
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z Capacity z Start-Up

z General Contractor Bechtel z Sub Contractor Enppi/Petrojet

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Gas Pipelines
1. East Mediteranean Gas Pipeline, which extends from ElArish City in Egypt t Ashkelon in Isreal, transfering Egyptian Gas to the Israeli Market, and Expected to be completed early 2008. 2. The Arab Gas Pipeline, which aims to transport and distribute Egyptian Natural gas to Jordan, Syria and Lebanon in its first phases. The project can be further expanded to allow Iraq and other Major gas producers in the region to export their natural gas to Europe, or even in the opposite direction through additional networks and loops thus forming the Arab Gas Network.
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Main Milestones for the Arab Gas Pipeline

(December 2000) : Signature of the MOU between Egypt, Syria and Lebanon to construct the Arab Gas Pipeline (February 2001) :Jordan joins the Agreement (June 2001) : Signature of Gas Sales Agreement between Egypt and Jordan (September 2001) : Arab Funding agents agree to finance the Project
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Turkey Turkey

Arab Arab Gas Gas Pipeline Pipeline Phases: Phases: - Over Over all all length= length= 1500 1500 km km - Nominal Nominal capacity: capacity: 10 10 BCM/Y BCM/Y Phase-1 Arish-Aqaba (264 km) July 2003 Phase-2 Aqaba-Rehab (394 km) February 2006 Phase-3 Rehab-Syrian Borders (30 km) scheduled to be completed early 2008 Phase-4 Rehab-Homs (330 km) Scheduled to be completed early 2008) Phase-5 Homs-kilis (220 km) (under negotiation ) Phase-6
Kilis-Turkish Network (90 km)

Syria
Banyas Homs Tripoli

Lebanon
Rehab Arish
Amman

36 Damascus

Egypt
CAIRO

Port Said

Jordan Aqaba

Sinai

Taba

(under tendering) Lebanon Branch completed

36

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Key success factors

1. Political will and support

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2- Completion of phases 1 &2 in record time due to efforts of dedicated consortium of Egyptian petroleum sector companies
swamps Loose soil mines

Sand dunes

mountains

Gulf of Aqaba crossing

Gulf of Aqaba

snow

rocks

Depth 850m
21

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3- Securing of required Finance:

The projects are economically feasible, a number of reputable financial institutions have responded swiftly to finance a portion of the completed phases. For phases 1 and 2, 430 million US dollars, were provided by the following financial institutions : - European Investment Bank
(120 MMUS$)

- The Kuwait Fund For Arab Economic Development

(100 MMUS$)

- The Arab Fund For Economic And Social Development

(50 MMUS$)

- The Jordanian Housing Bank for Trade and Finance

(Commercial Bank)
(160 MMUS$)
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EU Support

23

The EUs Vision

The 3rd Euro-Mediteranean Energy Ministerial Meeting- Athens (2002)

The Arab gas Pipeline will play a major Role in connecting Africa with Europe and Asia

24

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The Euro-Med Energy Ministerial Conference in Rome in December 2003

During the Euro-Med Energy Ministerial Conference in Rome in December 2003, two Declarations of Intent were signed to study the extension of the Arab Gas Pipeline and define a gas pipeline corridor to Central Europe.

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Egypt as An Energy Hub

Egypt, with its strategic location can be a hub for oil and gas playing a major role in securing part of the EUs energy supplies. This vision will help to achieve the EUs objective to improve Energy Security and Supply Diversification.

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New Planned Refineries

Abu Qir Gemsa Damietta Marsa Matrouh El Max

Alexandria
Ameria

Port Said Arish

Damanhour Tanta Banha

31

Sedi Krir

ESSAR MIDOR Suez

Ismailia

Cairo
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CNCEC

Giza

Mostorod

Suez

Sukhna

Egyptian Refining Company

29

Beni Suef

ez Su of lf Gu

Sukhona For Refining and Petrochemicals

28

Bakr

Gharib

Menia

Shoukeir

Assuit
27

Existing Refining Capacity 35 MM Tons Planned Refining Capacity 31 MM Tons 27

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Arzew

Skikda

ExistingGas GasPipelines Pipelines Existing GasPipelines PipelinesProjects Projects Gas ProposedPipelines Pipelines Proposed LNGExports Exports LNG Re-gasificationUnits Units Re-gasification LNGPlants Plants LNG

Egypt as an Energy Hub 28

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