The jewel of the crown is called Zohr. Discovered by the Italian firm ENI in 2015, is considered the largest gas deposit of the whole Mediterranean sea. It is estimated that it could hold some reserves of 850,000 million cubic meters, an amount similar to the set of the reserves of the rest of the wells in Egypt. Precisely, the beginning of its exploitation has allowed Egypt to move from the scant 114 million cubic meters per day that it produced at the end of 2016 to over 168 million, fair consumption of this fuel recorded in the country last year.
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Some observers fear a repeat of the same scenario of the beginning of XXI century. Then, the regime of Hosni Mubarak announced with bass drum and cymbals the discovery of several wells that turned the country into a net exporter. However, in the following years, shot up the internal consumption, and shortly after the 2011 revolution, the country was forced to cease the sale outside of the precious fuel, which is addressed particularly to Israel, Jordan and the other countries of the EU.
“In the past, the domestic market has been able to absorb the increases in production, so it is not clear that you can become an exporter,” notes Michele Dunne, an expert from the center for analysis Carnegie Endowment. In fact, no one knows for sure what is the growth potential of the domestic demand, since if there were a greater supply of natural gas, many companies could change their source of energy.
65% of domestic consumption of gas is dedicated to the production of electricity, but a good part of the plants still use fuel oil, a fuel that is highly polluting and of low quality that could be replaced by natural gas. “In 2017, the demand for electricity increased by 14%. This growing appetite not will soon taking into account the demographic growth and the economic trend,” says Edward Gardner, an analyst at FocusEconomics.
in order To multiply their export capacity, Egypt relies on the agreements reached last February with Israel, and in October in Cyprus. Both countries have also benefited from discoveries of deposits in the eastern Mediterranean the past few years. For logistical reasons, both of them pump the gas up to the egyptian coast, where there are two large liquefaction plants of this fuel, one of them of the Spanish multinational Unión Fenosa. The gas can’t be stored, Onwin and if not through pipelines, can only be exported prior liquefaction. Everything is provided for Israel to begin exporting gas to Egypt in January, while Cyprus will, from 2020, following the construction of a new gas pipeline.
Benefits for the intelligence services
The marshal Al-Sisi described it as “a goal” the trade deal reached with Israel, hinting that it would bring prosperity to the arab country. However, an investigative report of the reporter Hossam Bahgat for the publication egyptian Madamasr put seriously in doubt. “The benefits will go to the budget of the State, but to an obscure company owned by the intelligence services that it will purchase and sell the gas,” says Bahgat in a telephone conversation. In addition, in total, the price that Egypt will pay for the gas to israeli to be more expensive than european consumers pay, so it will be difficult to export. “Perhaps the only benefit is that, with the agreement, the State has been spared from paying fines in the millions for having failed to fulfil their contracts in the past,” he adds.
The precedent of the first decade of this century is not flattering for the suffering egyptian citizen. Then, there were several intermediaries close to the former dictator Mubarak, as the tycoon Hussein Salem, who amassed a real fortune thanks to their corrupt practices. Now, the most benefits will be one of the security bodies, a fact consistent with the large expansion of the economic activities of the Army since the coup of 2013, and that have turned it into an empire. “If Egypt becomes a hub … will provide new jobs, but the amount will be relatively small,” says Dunne.
in Addition to an economic impact, as always, the energy equation weighs in the balance geostratégicos of the region. The EU is very interested in the development of the market for gas in the eastern Mediterranean to relieve their dependence on the supply of Russian natural gas, given the rising tensions in Ukraine. For its part, Israel sees in it an excellent opportunity to strengthen its economic ties with the arab State’s most populous, just when its opening to the Gulf countries using the expansionism iran as a scarecrow begins to give its fruits. Although Egypt established diplomatic relations with Israel in 1979 with the Camp David accords, their relationship has been defined as a “cold peace”.
For Cairo, the manna energy is a tool to enhance its condition of regional power, undermined by internal instability posrrevolucionaria and, in addition, to strengthen its links with Europe. But according to Dunne, it is not clear that the cross strains between the countries of the region —Turkey, Cyprus, Lebanon, Egypt and Israel— allow the creation a regional market of gas that is stable. “Now, it does not seem likely to transform the role of Egypt in the region, which is important, but it ceased to be crucial in the last decade,” predicts the analyst. After the enlargement of the Suez canal, and the construction of a new capital in the desert, Al-Sisi is dreaming big now thanks to natural gas.
