EGYPT – Italian energy company ENI has signed a series of agreements with its partners to restart the liquefied natural gas (LNG) plant in Damietta by the first quarter of 2021 and for the amicable settlement of disputes related to Union Fenosa Gas.

Agreements were signed with the Egyptian government, the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS) and the Spanish company Naturgy.

This comes with what ENI is describing as the “amicable settlement” of disputes of Union Fenosa Gas and SEGAS with EGAS and the Egyptian government, and the subsequent corporate restructuring of Union Fenosa Gas itself, whose assets will be shared between the partners ENI and Naturgy.

The liquefaction plant is owned by SEGAS, which is 40% owned by ENI through Union Fenosa Gas (50% ENI and 50% Naturgy). The plant has a capacity of 7.56 billion cubic meters per year but has been idle since November 2012.

The participation of Union Fenosa Gas in the Damietta plant (80%) will be transferred 50% to ENI and 30% to EGAS. The resulting shareholding of SEGAS will therefore be ENI 50%, EGAS 40% and EGPC 10%.

ENI will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights, 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.

Naturgy said in a separate statement that it will receive a series of cash payments totalling around US$600 million under the deal, which when completed will result in its departure from Egypt and the end of its joint venture with Eni.

Eni, one of the biggest foreign oil and gas producers in Africa, discovered Egypt’s biggest-ever gas field Zohr in 2015 and has other assets in the Mediterranean.

Like other majors, Eni is looking to decarbonise and sees LNG and gas as important resources in that transition.

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