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Energy in Egypt


Egypt is an important non-OPEC energy producer. It has the sixth largest proved oil reserves in Africa. Over half of these reserves are offshore reserves. Although Egypt is not a member of OPEC, it is a member of the Organization of Arab Petroleum Exporting Countries.

Crude oil

 
Oil refining in Alexandria

Commercial quantities of oil were first found in 1908, and more petroleum was found in the late 1930s along the Gulf of Suez. Later, large oil fields were discovered in the Sinai Peninsula, the Gulf of Suez, the Western Desert, and the Eastern Desert. The Abu Rudeis and Ra's Sudr oil fields in the Sinai, captured by Israel in 1967, were returned to Egyptian control in November 1975, and the remaining Sinai oil fields reverted to Egyptian control by the end of April 1982. As of 2005, Egypt's proven oil reserves were estimated at 3.7 billion barrels (590×106 m3), of which 2.9 billion barrels (460×106 m3) was crude oil and 0.8 billion barrels (130×106 m3) were natural gas liquids.[9] Oil production in 2005 was 696,000 barrels per day (110,700 m3/d), (down from 922,000 barrels per day (146,600 m3/d) in 1996), of which crude oil accounted for 554,000 barrels per day (88,100 m3/d).[9]

Approximately 50% of Egypt's oil production comes from the Gulf of Suez, with the Western Desert, Eastern Desert, and the Sinai Peninsula as country's three other primary producing areas. Domestic consumption was estimated at 564,000 barrels per day (89,700 m3/d) in 2004. Net oil exports in that same year were estimated at 134,000 barrels per day (21,300 m3/d). The Suez Canal and the 322-kilometre (200 mi) Sumed pipeline from the Gulf of Suez to the Mediterranean Sea are two routes for oil from the Persian Gulf, which makes Egypt a strategic point of interest in world energy markets. Although the Suez Canal Authority (SCA) has deepened the canal so that it can accommodate the largest bulk freight carriers, the canal was deepened a further 20 metres (66 ft) in 2006 to accommodate very large crude carriers (VLCCs).

As of 2005, Egypt operates nine refineries that are capable of processing crude oil at an estimated rate of 726,250 barrels per day (115,465 m3/d). The largest refinery is the El-Nasr facility located at Suez. It is able to process 146,300 barrels per day (23,260 m3/d). The National oil company is the Egyptian General Petroleum Corporation.

Natural gas

Major discoveries in the 1990s have given natural gas increasing importance as an energy source. As of 2005, the country's reserves of natural gas are estimated at 66 trillion cubic feet (1.9×1012 m3), which are the third largest in Africa. Probable reserves have been placed at or more than 120 trillion cubic feet (3.4×1012 m3). Since the early 1990s, significant deposits of natural gas have been found in the Western Desert, in the Nile Delta and offshore from the Nile Delta. Domestic consumption of natural gas has also risen as a result of thermal power plants converting from oil to natural gas. Egypt's production of natural gas was estimated at 2,000 billion cubic feet (57×109 m3) in 2013, of which almost 1,900 billion cubic feet (54×109 m3) was domestically consumed.

Natural gas is exported by the Arab Gas Pipeline to the Middle East and in the future potentially to Europe. When completed, it will have a total length of 1,200 kilometres (750 mi).Natural gas is also exported as liquefied natural gas (LNG), produced at the plants of Egyptian LNG and SEGAS LNG.BP and Eni, the Italian oil and gas company, together with Gas Natural Fenosa of Spain, built major liquefied natural gas facilities in Egypt for the export market, but the plants were largely idled as domestic gas consumption has soared.

In March 2015, BP signed a $12 billion deal to develop natural gas in Egypt intended for sale in the domestic market starting in 2017.[14] BP said it would develop a large quantity of offshore gas, equivalent to about one-quarter of Egypt's output, and bring it onshore for domestic consumers. Gas from the project, called West Nile Delta, was expected to begin flowing in 2017. BP said that additional exploration might double the amount of gas available.

In September 2015, Eni announced the discovery of the Zohr gas field, largest in the Mediterranean. The field was estimated at around 30 trillion cubic feet (850×109 m³) of total gas in place.

Shale oil

The Safaga-Quseir area of the Eastern Desert is estimated to have reserves equivalent about 4.5 million barrels (720×103 m3) of in-place shale oil and the Abu Tartour area of the Western Desert is estimated to have about 1.2 million barrels (190×103 m3) of in-place shale oil. The 1000 to 2000 foot thick and organically rich, total organic content of about 4%, Khatatba Formation [15] in the Western Desert is the source rock for wells there and is a potential source for shale oil and shale gas.[16] Apache Corporation, using substantial assets acquired in 2010 from BP after the Deepwater Horizon disaster, is the major operator in the Western Desert,[17] often in joint ventures with Egyptian General Petroleum Corporation (EGPC) such as Khalda Petroleum Company and Qarun Petroleum Company. In 1996 Apache merged with Phoenix Resources, which had made the Qarun discovery in 1994, and took over operations of the Qarun Concession in Egypt.[18] Apache has developed about 18% of the 10 million acres it controls, in 2012 running a score of rigs; drilling about 200 development and injection wells; and about 50 exploration wells with a success rate of about 55%. Plans for 2013 included an investment of about $1 billion in development and exploration.[19] On August 29, 2013 Apache announced sale of a 1/3 share of its Egyptian assets to Sinopec for $3.1 billion effective January 1, 2014; Apache would continue to be the operator.

Oil shale

Oil shale resources were discovered in the Safaga-Quseir area of the Eastern Desert in the 1940s. The oil shale in the Red Sea area could be extracted by underground mining. In the Abu Tartour are, oil shale could be mined as byproduct whilst mining for phosphates. Oil shale in Egypt is foreseen as a potential fuel for the power generation.

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