Eni reached an agreement with its partners to restart the liquefied natural gas (LNG) plant in Damietta, Egypt, including settlement of disputes related to Union Fenosa Gas (UFG).
Eni signed on Tuesday a series of agreements with Egypt represented by the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS) and the Spanish company Naturgy, paving the road for restarting the Damietta Liquefaction Plant in Egypt by Q1 of 2021.
The station has a capacity of 7.56 billion cubic meters annually, but has been inactive since November 2012. The agreement will transfer 80% of the Damietta plant to Eni, EGAS, and EGPC 50% and 40%, and 10% respectively.
Naturgy said in a separate statement that it will receive a series of cash payments totalling around $600 million under the new agreement, which when concluded will result in its departure from Egypt and the end of its joint venture with Eni.
Eni will also take over the natural gas purchase contract for the plant and receive the corresponding liquefaction rights, thus increasing the LNG volumes in its portfolio by 3.78 billion cubic meters per year, which will be available on a freight on board "FOB" basis, with no restrictions.
With regard to UFG assets outside Egypt, Eni will undertake the commercial activities of natural gas in Spain, strengthening its presence in the European market.
Eni is one of the biggest foreign oil and gas producers in Africa, discovered Egypt’s biggest gas field "Zohr" in 2015, and Norous field, as well as other fields in the Mediterranean.
Egypt has regained self sufficiency to meet domestic gas demand and can allocate surplus production for export through its LNG plants.
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