Eni open to selling stake in supergiant Egypt gas find

“For Israel, this closes the option of exports to Egypt but the real motherload for Israel was the domestic market”, said Brenda Shaffer, energy specialist at the University of Haifa.

It began imports of liquefied natural gas (LNG) in June.

Analysts highlight two issues – the size of Eni’s discovery is yet to be confirmed, even if initial estimates are more often revised up than down, and it may be around eight years before Zohr will be ready for exports.

Israeli energy shares fell yesterday a day after Italian energy group Eni SpA announced the discovery of what is potentially the largest natural gas field in the Mediterranean off the coast of Egypt.

Although Noble Energy and its partners have run into some trouble with Israeli regulators, which has slowed development, the Israeli government has recently cleared up their regulatory policy, hopefully easing the way for the large gas fields to move toward production.

Eni on Sunday said the deep-water deposit in the Zohr prospect in the Shorouk block may hold 30 trillion cubic feet of fuel, making it the biggest gas discovery in the Mediterranean Sea.

That leaves Israel comparatively further advanced, with the Tamar field already onstream and Leviathan, despite the domestic political and investment partnership problems it has faced, set to be so in 2019.

Before the uprising, Egypt sold gas to Jordan and Israel, by pipelines, and had LNG plants for sales overseas.

Turkey could also be a significant market for Israeli gas, despite the current cold relations between the countries.

Last year, Eni had to trim its dividend amidst an environment of tumbling oil prices.

“Egypt has been in such a tight spot politically and in terms of its energy situation for the past five and a half years, this couldn’t have come at a better time Egypt”, he added. Eni has been in Egypt since 1954 through its subsidiary IEOC.

The discovery well, Zohr 1X NFW, was drilled to a total depth of about 4,131 m (13,553 ft) and hit 630 m (2,067 ft) of hydrocarbon column in a carbonate sequence of Miocene age with excellent reservoir characteristics (more than 400 m of net pay), Eni said in a news release.

Eni CEO Claudio Descalzi said: “Our exploration strategy allows us to persist in the mature areas of countries which we have known for decades and has proved to be winning, reconfirming that Egypt has still great potential”.