New analysis is estimating that Eni’s Zohr natural gas discovery has significant technical, commercial, and strategic implications for the gas market in Egypt, according to IHS Energy.
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Map of Zohr. From Eni. |
Eni discovered the largest gas field in Egypt and the Mediterranean Sea in August, the Zohr field, which holds the potential of up to 30 Tcf of lean gas in place, or 5.5 billion boe, over an area of about 100sq km.
IHS’s analysis says that Zohr has the potential to supply much of Egypt’s increasing domestic gas demand and will likely have an impact on regional gas commercialization plans. In addition, the technical, commercial, and strategic implications of Zohr is estimated to impact Egypt, the region and the industry, where Egypt’s access to monetization infrastructure will likely put it ahead of rivals if commercial terms are right.
“Egypt has fast-growing domestic demand and decreasing production at the same time, so the Zohr discovery represents a major source of relief in the context of increasing gas imports,” Mohamed Zine, regional director for Africa at IHS Energy said.
The Zohr 1X NFW discovery well, located in the Shorouk Block (Block 9) at 4757ft (1450m) water depth, was drilled to a total depth of some 13,553ft (4131m) and hit 2067ft (630m) of hydrocarbon column in a carbonate sequence of Miocene age with excellent reservoir characteristics.
Zohr’s structure has also a deeper Cretaceous upside that will be targeted in the future with a dedicated well. Eni is appraising the field with the aim of accelerating a fast track development of the discovery that will use at best the existing offshore and onshore infrastructure.
Now that Zohr is in play, the discovery could lead to the end of Egyptian liquefied natural gas (LNG) imports, bring Egypt out of its four-year slump due to increasing energy deficits.
“While there are hopes that Egypt’s exports may be revived at some stage, the immediate focus for Zohr will be on the domestic market”, said Zine.
In addition, IHS said that the imbalance for domestic needs is such that Egypt needs more big discoveries to have a significant impact on the regional gas market, or make headway with ongoing negotiations to host regional gas discoveries for export through its facilities.
The development of Zohr will largely depend on gas prices that the Egyptian government offers.
“Gas prices have been increasing, with Eni recently obtaining prices of $5.88/MMbtu. In addition, liberalization of the Egyptian energy sector may allow higher-priced gas to be sold directly to industrial buyers rather than to state-owned companies, a point that is likely to encourage further exploration and may yet help Egypt towards newly framed ambitions to act as a regional gas hub,” IHS said.
Earlier this month, Eni chief Claudio Descalzi met with the president of Egypt to discuss the company’s operations in the country, including the development of the Zohr field.
Through its subsidiary IEOC, Eni is operator of the Shorouk Block with 100% interest.
Read more:
Eni presents deepwater Zohr plan
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