All countries around the Mediterranean Sea and especially the North African countries should adopt policies to further encourage upstream exploration and developments, as well as the adoption of reforms able to guarantee a balanced and sustainable internal gas market. On these bases, clearly, North Africa has a future as a key gas hub given its vicinity to an important market such as the European gas market. More specifically, Egypt can become a success story, being able to combine strong growth in production with growth in the domestic market as well as in the utilization of gas export facilities (Damietta and Idku), which grant a constant connection between internal and international prices.
As of today, Egypt is already independent of LNG imports thanks to the latest discoveries and developments. How long the recently achieved gas demand/supply balance can be maintained will very much depend on the country’s definition and adoption of new reforms capable of guaranteeing it, not least of which the reduction of state subsidies and the increase in power generation efficiency.
All the right ingredients are there, facilities for LNG export like Damietta that should be put in service as soon as possible, together with gas supply from the latest giant developments like Zohr and future gas from new exploration. Egypt needs to target all premium international markets, starting with Europe, which has the economic advantage of proximity and allows the minimization of transport costs.
There is positive news about the growth of natural gas demand worldwide. Natural gas has huge advantages in terms of availability and affordability and its environmental impact is very limited in comparison with other fossil fuels such as coal or oil. The Mediterranean area is no exception and we foresee a significant potential for growth. However, the situation in each country is very specific. Ultimately, the development of natural gas production and consumption will depend on appropriate policies put in place by the individual governments.
It is fundamental to have a recurring high-level forum in which all involved institutions, partners and stakeholders can discuss the respective strategy in each specific area as well as identify business opportunities to develop the gas market.