Italian energy major Eni signed a series of agreements with paving the way for the restart of the Damietta liquefaction plant in Egypt by June 2020.
The agreements have been signed with the Egyptian government, the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS) and the Spanish company Naturgy, Eni said in its statement.
The liquefaction plant’s owner is the company SEGAS, which is 40 percent owned by Eni through Union Fenosa Gas (50 percent Eni and 50 percent Naturgy). The plant has a capacity of 7.56 billion cubic meters per year but has been idle since November 2012.
Also, thanks to the fast time to market of Eni’s new natural gas discoveries, especially the ones in the Zohr and Nooros fields, Egypt has regained its full capacity to meet domestic gas demand and can allocate surplus production for export through its LNG plants, Eni said.
The agreements provide for the amicable resolution of the pending disputes of Union Fenosa Gas and SEGAS with EGAS and ARE, and the subsequent corporate restructuring of Union Fenosa Gas, whose assets will be divided between the shareholders Eni and Naturgy.
In particular, the participation of Union Fenosa Gas in the Damietta plant (80 percent) will be transferred 50 percent to Eni and 30 percent to EGAS. The resulting shareholding of SEGAS will, therefore, be Eni 50 percent, EGAS 40 percent and EGPC 10 percent.
Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights, thus increasing the volumes of LNG in its portfolio by 3.78 billion cubic meters per year, which will be available on an FOB basis, with no destination restrictions.
As regards Union Fenosa Gas’ assets outside Egypt, Eni will take over the commercial activities of natural gas in Spain, strengthening its presence in the European gas market.