Egypt Energy rief NEWS ANALYSIS Issue 96 PROJETS …energy.frontieregypt.com/sites/all/libraries/ckfinder/userfiles... · PMS installs offshore platform for GP ... was agreed on by

Egypt Energy Brief Issue 96 30 November 2017

NEWS ANALYSIS PROJECTS DATA COMPANIES

ENERGY NUMBER OF THE WEEK

135 piasters

The electricity ministry has reportedly set 135

piasters per kWh as the maximum tariff for

Waste-to-Energy (WTE) projects.

Reports added that the environment ministry

sent the electricity ministry a memorandum

on 26 November clarifying the WTE offers

it has received from investors, without

specifying any companies involved.

Part of the Egypt Energy Monitor | energy.frontieregypt.com

POWER AND RENEWABLES Elsewedy, Marubeni still in talks over 500MW wind farm EEHC receives Hamrawein bids ELF withdraws from first FiT round Parliament approves three nuclear laws Siemens O&M tender said to attract 10 bids Updates on PPA negotiations for Al Nowais coal plant Ministry to finish replacing overhead lines by June WTE tariff 'set at 135 piasters' ACWA gas plant location ‘yet to be determined’ Egypt more attractive for renewables y-o-y, says study Bids reviewed for JICA-funded distribution project Minister: GERD construction to continue Electricity ministry 'owed EGP27bn' in dues Electro Cable reports further losses Power distribution maintenance to cost ‘EGP8bn’

OIL, GAS, FUEL AND PETROCHEMCIALS Zohr still on track for end-2017 start-up PMS installs offshore platform for GPC Aramco to start refining crude in Egypt by Q1 2018 IFC disbursing $75m Apex loan KIMA 2 now 75% complete Zohr first phase ‘96% complete’ Shell, Cyprus 'negotiating gas pipeline cost' Petrojet signs MoU with NPCC Fuel oil consumption falls further El-Molla meets chairman of Libya's NOC Fuel imports down y-o-y in August Apex appoints CFO Egypt Gas board approves New Capital contracts Eni gives further details on Cyprus drilling plans Israeli gas imports 'still on table' EGX Updates (Maridive, ELMACO) EGX Updates (Egypt Gas, Elsewedy) EGX Updates (Egypt Gas) EGX Updates (MCI, ELMACO) EGX Update (KIMA)

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POWER AND RENEWABLES

Elsewedy, Marubeni still in talks over 500MW wind farm

A consortium of Elsewedy Electric and Marubeni is still in talks with the New and Renewable Energy Authority (NREA) over its planned 500MW wind farm, said Elsewedy in an EGX statatement.

The company added that it would release the cost of the project and other details once an agreement has been reached, without providing further details.

Earlier today, the EGX suspended trading on Elsewedy and requested that the firm release a response to its inquiries regarding a local report published yesterday on the project.

The EGX later resumed trading on the firm after it provided a response.

The report in question was published by Al Borsa. In it, an unnamed source said that the the consortium was still in talks with NREA over where the land would be allocated for the planned project.

According to the report, it has not yet been decided whether the BOO project, which is reportedly to be built over two 250MW phases, would be located in the Gulf of Suez or in the West Nile area.

An MoU was signed for the project in March with the Egyptian Electricity Transmission Company (EETC), at which point Elsewedy said that it would be located on the Red Sea coast, north of Hurghada at Gebel el Zayt, where several other wind farms are planned.

Sources claimed in the recent report that measurement work at the site would start 10 days after it had been allocated.

The power purchase price would not be more than 3.8 cents per kWh, which is the same price that was agreed on by the Toyota-Engie-Orascom consortium for its planned 250MW wind farm in the Gulf of Suez, said the sources.

The report claimed that the consortium would begin negotiations with lenders to finance the project after receiving the land, but was already in talks with Japanese banks.

On a separate note, unnamed sources told Al Borsa that Elsewedy has halted negotiations with the electricity ministry over acquiring sites for six individual 100MW wind projects on the Red Sea coast and will no longer pursue the projects.

The report said that Elsewedy took the decision because the projects, which were to be located north of Hurghada at Gebel el Zayt, were to be carried out on an Independent Power Producer (IPP) basis, which was not deemed acceptable.

Earlier this month, Elsewedy said in an EGX statement that it was in talks with the electricity ministry to acquire sites for the projects planned on an IPP basis.

It added at the time that the plants were planned under a usufruct system for 25 years, without providing further details.

It is not clear what changed during this short period, though there is generally a high level of opacity and uncertainty about the status of the numerous wind projects being planned in Egypt.

Earlier this month, local press reported that the cabinet had approved power purchase agreements for three planned wind projects with 1,070MW of total capacity including the Marubeni-Elsewedy project.

Egypt Energy Brief | 26 November - 29 November 2



Lamyaa Youssef, Head of the Feed-in-Tariff (FiT) unit at the Egyptian Electricity Holding Company (EEHC), said at the time that meetings were set to take place with the companies next month to discuss legal and financial issues.

Unnamed sources added at the time that power purchase price was in the range of 3.6-3.8 cents per kWh and would have the standard 25-year duration.

Elsewedy previously said that preparations for developing the 500MW wind farm were set to be completed in less than 18 months, with plans to start commercial operation “in phases starting from mid-2020.”

The firm and Marubeni were also working together on a planned 4,000MW coal power plant in Marsa Matrouh, the status of which is unclear after the electricity ministry focussed on moving forward with a single plant at Hamrawain.

Elsewedy is a major integrated local company active in various subsectors of the energy and power industries, including EPC on power generation projects, wires, cables, transformers, and renewables.

The firm provides various types of meters including electronic, electromechanical and standard meters for the residential, industry, and trade sectors.

EEHC receives Hamrawein bids

The Egyptian Electricity Holding Company (EEHC) received on 26 November offers to build the planned 6GW coal plant in Hamrawein, a source familiar with the matter told the Egypt Energy Monitor.

A decision on the winning bidder could be made as early as January, they said.

Proposals were submitted by a consortium of Shanghai Electric and Dong Fang Electric, GE, and a grouping of Japanese companies led by Mitsubishi-Hitachi Power Systems (MHPS).

Those were the same three bidders that had previously submitted their offers for building the plant in May before project consultant Tractebel set out a minimum functional specification for the plant and asked bidders to resubmit their proposals.

Two weeks ago, unnamed sources said that the EEHC had set a 26 November deadline for bidders to submit their proposals for the plant, adding that they would be reviewed over a 10-month period and the project would cost $10bn.

The timeline on the project has been previously subject to significant slippage, and there have been conflicting reports about the possible phasing and pricing of the scheme.

The Egypt Energy Monitor understands that China's Harbin is likely to be the EPC contractor on the GE bid, and to be bringing financing, while the Chinese consortium will act as EPC contractor itself.

The plant is not expected to begin operations until at least 2025, and will be built on an EPC + Finance basis.

Egypt had been planning a much larger number of coal plants, with these scaled back to a single project due to concerns over cost and whether such large-scale additional capacity would be required.

Tractebel, which is part of Engie, was awarded the consultancy work several months ago.

ELF withdraws from first FiT round

Renewables firm ELF has officially withdrawn from the first round of the Feed-in-Tariff (FiT) scheme, a source from the New and Renewable Energy Authority (NREA) told the Egypt Energy Monitor.

The source added that the firm had already returned its site to NREA, but did not provide the reasons behind ELF's decision.

However, it had been rumoured that Infinity Solar was planning to partner with ELF on its 50MW PV plant project but backed out at the last minute, leaving the firm unable to find other backers.




Earlier this month, a source familiar with the matter told the Egypt Energy Monitor that ELF had not started construction work at the plant, adding that the company had submitted a request to the cabinet for an extension to the construction start date.

An electricity ministry statement released earlier this month did not mention the ELF project as one of those being carried out under the first round, which raised concerns about the project's status.

The statement specified that two Power Purchase Agreements (PPAs) had been signed under the first round for projects with 100MW of total capacity being carried out by Infinity Solar and FAS.

Also in November, unnamed sources told local press that ELF was facing difficulties in carrying out its project and had asked to defer payment on its letter of guarantee.

In June, Managing Director Islam Soliman said that the firm was set to start construction work in August and that the project would be completed and connected to the national grid by Q2 2018, indicating a significant delay in the project's progress.

Infitnity Solar is expected to start operating its 50MW plant under the first round by the end of this month. FAS is expected to operate its project in March.

Some 30 projects reached financial closure in October for projects under the second round of the scheme which are being funded by various international lenders including the European Bank for Reconstruction and Development, the International Finance Corporation (IFC) and the Asian Infrastructure Investment Bank (AIIB).

Developers are waiting for the Egyptian Electricity Transmission Company (EETC) to finish its review of their project documents, which was previously expected to be concluded in December.

Parliament approves three nuclear laws

The parliament approved on 27 November three laws associated with nuclear activities and plants, according to a parliament statement, laying the framework for an administrative restructuring in the sector.

A five-hour emergency meeting was held by the parliament before the approvals were granted, reported state-owned Al Ahram, adding that the laws still need to be ratified by the president.

The announcement said that the first approved law was associated with creating an “executive authority for supervising nuclear plants for power generation.”

The authority will be responsible for setting out programmes to supervise the execution of nuclear projects and provide all the necessary information to the Nuclear Power Plants Authority (NPPA), according to the parliament statement.

Al Ahram added that the authority will be affiliated with the electricity ministry and will be responsible for technical supervision of nuclear plants, adding that it would be located in Cairo and could have branches in or outside of Egypt.

According to the newspaper, the authority's duties include the following:

• Issuing the annual financial reports, which would be revised by the electricity minister and the parliament's energy and environment committee

• Supervising test operations of nuclear projects and ensuring they are carried out in a timely manner, while coordinating with relevant authorities

The second law involved amendments to Law 13/1976 of the Nuclear Power Plants Authority (NPPA), which will supervise the performance of contractors assigned to build nuclear plant(s) in Egypt and conduct reports on the progress of these projects, said the parliament announcement.




Al Ahram said that the NPPA will operate under the electricity ministry, adding that the “amendments will pave the way for the authority to sign contracts with the private sector in Egypt and outside of Egypt in the field of building nuclear power stations, so long as such agreements do not harm national security.”

It also said that the authority’s board will include ten members to be selected by the electricity minister and approved by the president.

The newspaper confirmed that the amendments would grant tax and customs exemptions on all the tools, spare parts, equipment, materials and vehicles to be imported by the NPPA.

All firms, contractors, and sub-contractors contractedby the authority will be exempt from tax. In addition, loans for nuclear projects from international lenders will be exempt.

The third law approved involved amendments to Law 7/2010 for Organising Nuclear and Radiological Activities, which will give the NPPA the right to carry out all regulatory and supervisory activities related to Egypt's nuclear and radiological sectors.

The speaker of the House of Representatives, Ali Abdel Aal, told Al Ahram that the laws were discussed and approved following an urgent request from the government.

Meanwhile, the head of the parliament's energy and environment committee, Talaat el-Sewedi, said that the approval was a necessary step to proceed with the Dabaa nuclear power plant.

On 26 November, parliament's energy and environment committee approved amendments to Law 13/1976 of the NPPA.

Yesterday, the parliament announced that Abdel Aal had invited the council to convene for a general meeting today to review amendments to Law 7/2010 for Organising Nuclear and Radiological Activities, as well as related draft laws.

In September, the Cabinet approved amendments to both the 13/1976 and 7/2010 laws, according to cabinet statements at that time.

The draft law to amend Law 13/1976, which was approved by the cabinet in March, also gives the NPPA the sole right to propose, build, operate, and manage nuclear power plants and related projects.

Egypt is currently planning its first nuclear power plant at Dabaa on the northwest coast, with Russia’s Rosatom.

Earlier this month, parliament committee deputy Essam Abdullah said that the House of Representatives had approved all contracts and agreements for the plant, which electricity minister Mohamed Shaker said would be signed by end-2017.

Siemens O&M tender said to attract 10 bids

Ten companies are reportedly competing in the tender issued by the Egyptian Electricity Holding Company (EEHC) to provide operations and maintenance (O&M) at the three Siemens-led power plants, unnamed EEHC sources told Al Borsa.

The sources said that a general tender has been issued, rather than the limited one that was previously planned.

It is not clear when the tender was issued or whether the firms have already submitted bids.

The sources said that the EEHC had previously requested that four companies/consortiums submit financial and technical bids, which it then reviewed to identify the best offers, before issuing the O&M tender.

The EEHC is expected to finalise the agreement with the winning bidder before the end of the year.

The source identified eight of the competing firms/consortiums as follows:

• Siemens

• Orascom – ‘Adera’ consortium

• Elsewedy Electric – EDF consortium

• Steag




• Hassan Allam

• GD France

• Doosan Group

• Mitsubishi

Earlier this month, unnamed sources said that the EEHC would release a limited O&M tender for the plants in December, adding that the tender would be open to four firms/consortiums that submitted proposals for the original tender.

These were reportedly reviewed by the EEHC, which then decided to issue the new tender. The involved firms/consortiums were said to be Siemens, Orascom – ‘Adera’, Elsewedy Electric – EDF, and Steag.

Sources added at the time that an EEHC committee would review the bids over a 20-30 day period, with a winner expected in early 2018.

In July, EEHC chairman Gaber el-Dessouki said that the O&M tender was expected to be awarded and signed by January, adding at the time that the EEHC would soon finish reviewing submitted technical proposals.

That same month, local press reported that the EEHC had received four technical proposals for the O&M tender, from the same firms mentioned in the previous report.

Sources said at that time that the EEHC had formed a committee to review the offers, adding that the review was expected to be finished by August, at which point the firms would be asked to submit their financial proposals.

Siemens is leading the development of three 4,800MW combined cycle gas-fired plants in Egypt, each with eight units.

The plants were agreed upon in an €8bn contract in June 2015. The projects are being implemented on an EPC + Finance basis.

Updates on PPA negotiations for Al Nowais coal plant

Dubai-based Al Nowais has reportedly proposed a power purchase price of 5.8 cents per KWh for the 2,640MW Ayoun Mousa coal plant, unnamed sources told Al Mal.

This is likely to be considered relatively high, given the cost of power generation from other sources.

The Egyptian Electricity Holding Company (EEHC) has not yet discussed the proposed price, the sources said.

Various reports have circulated on the status of negotiations over the Al Nowais plant in recent months. Discussions on terms between the two parties have already been taking place for over a year.

Earlier this month, unnamed sources said that the the electricity ministry was still working with the finance ministry to finalise the Power Purchase Agreement (PPA) for the plant.

They said that the ministries and Al Nowais had agreed to lower the tariff and were "close" to finalising the agreement for the plant.

Last month, local press reported that the electricity ministry was still reviewing the power purchase price for the plant.

In September, it was reported that the tariff suggested by Al Nowais was too high, and the EEHC was trying to reduce it.

It has been agreed that the project would be subject to a usufruct system for 25 years.




Al Nowais reportedly established two firms after signing the MoU with the electricity ministry in 2014: one to manage and operate the plant and one to handle logistics.

The first phase of the $4.5bn scheme is reportedly expected to start operations at a capacity of 1,320MW by FY2023/24, while the second phase will reportedly enter operations at 1,320MW by FY2024/25.

These timetables are likely to be pushed back.

In late January, unsourced reports claimed the ministry had decided to delay the timeline for the Al Nowais plant from its 2017-2022 plan to 2022-2027.

The sources said at that time the Emirati company and a number of lenders had not approved some of the terms in the contract, including a local arbitration clause, and that there was a lack of agreement on a sovereign guarantee for the scheme.

Ministry to finish replacing overhead lines by June

The electricity ministry will finish replacing overhead lines by June 2018 at a cost of EGP1bn, said electricity minister Mohamed Shaker, according to Al Borsa.

He did not provide any further details, but was likely referring to the previously-announced EGP1bn first phase of the ministry's EGP3bn project to replace medium-voltage overhead power lines that are considered to pose risks to residential areas.

Last month, ministry undersecretary Sabah Mashaly said that the electricity ministry had allocated the following amounts for the project:

• EGP1bn from the Informal Settlements Development Fund (ISDF)

• EGP2bn from the planning ministry

It was not clear at that time how these allocations aligned with the project phases.

Mashaly also said at that time that initial project studies had indicated that replacing the lines would cost EGP40bn, which would be too much for the electricity ministry to cover alone.

In September, the electricity ministry said that it would start replacing high and medium voltage overhead cables in residential areas to prevent injuries.

In March, planning minister Hala el-Saeed announced a project to replace 2,481km of overhead power lines across Egypt with underground lines.

This project is part of the ministry's plan for FY2017/18 and will be carried out by subsidiaries of the Egyptian Electricity Holding Company (EEHC) over two years.

Egypt's transmission network is set to be upgraded and expanded significantly in the coming years in parallel with the construction of myriad new thermal and renewable power plants.

WTE tariff 'set at 135 piasters'

The electricity ministry has set 135 piasters per kWh as the maximum tariff for Waste-to-Energy (WTE) projects, unnamed sources told Al Borsa.

The sources said that the environment ministry sent the electricity ministry a memorandum on 26 November clarifying the WTE projects offer it has received from investors, without specifying any companies involved.




The 135-piaster rate is the same as that set for the highest consumption bracket in the new electricity tariffs imposed in July. WTE was not included under those tariffs.

The sources added that governorates and the state budget would bear any future rate hikes.

They also said that the finance ministry agreed to pay an extra 10% more than the tariff amount for the use of residential waste, as this process demands higher specifications.

Prime Minister Sherif Ismail led a meeting last week to determine the WTE tariff after holding discussions with potential developers, said the report, adding that it was attended by representatives from Empower, GKC, Oceania for Engineering Systems, and 'FMC.'

No further details were provided.

Various reports have been circulating about the WTE tariff over the past few months, but no official announcements have been made.

Earlier this month, unnamed sources said that the cabinet had assigned an unnamed consultant to carry out a new feasibility study on the WTE tariff and to recommend a suitable tariff scheme.

The government was still working out how various authorities would share the cost of the tariff, said New and Renewable Energy Authority (NREA) head Mohamed al-Khayyat at that time.

He added that the environment ministry had refused to pay any of the tariff, citing a lack of funds.

In July, electricity minister Mohamed Shaker announced that the ministry would not set a fixed WTE tariff, adding that the WTE tariff announced by the cabinet was only an indicator price.

It is not clear whether the cabinet approved the 145 piasters per kWh tariff proposed in June.

Reports earlier in the year suggested that the government would set the WTE tariff at 121 piasters per kWh and link 50% of the price to the dollar exchange rate at the due date.

This rate was higher than the provisional 92 piasters that was outlined in 2016.

There is thought to be sizable commercial interest in WTE plants in Egypt, but the lack of a reliable and cost-effective supply chain for significant volumes of waste is considered to be a challenge.

ACWA gas plant location ‘yet to be determined’

The electricity ministry is still deciding on the new location of ACWA Power’s planned 2,250MW combined cycle gas-fired plant, having limited the options to Qena and Luxor, unnamed sources told Al Mal.

The ministry is also in talks with the petroleum ministry to determine which of the two governorates is closer to the gas grid, in order to decide which location would enable the fastest and cheapest connections.

They said that the plant is expected to be relocated to Qena, adding that negotiations with Saudi-based ACWA have been delayed until the new location is finalised.

The sources also said that the power purchase price and other aspects of the project will be reviewed again.

ACWA is still planning to carry out the project and will use GE technology, said the sources.

In October, local press reported that the project was set to begin operations by FY2022/23 at an initial capacity of 1,500MW.

A second 750MW phase was reportedly to begin operations by FY2023/24.

In May, unnamed sources claimed that the electricity ministry had agreed with ACWA to relocate the project to Luxor, adding at the time that negotiations were ongoing with the governorate.

Earlier that month, sources said that the cabinet had decided to relocate the project to an unspecified location in Upper Egypt, from its original location at Dayrout in Beheira, due to the availability of transmission infrastructure.




The 2,250MW plant carries an estimated cost of $2-$2.5bn.

The vast majority of large-scale conventional power plants announced last year and this year are still on hold, with essentially the only active projects being the three Siemens-led gas plants.

ACWA Power, established in 2004, is also planning to carry out three PV plants under the second round of the Feed-in-Tariff (FiT) scheme.

Loans for these projects have been signed by the European Bank for Reconstruction and Development (EBRD) and it reached financial closure in October.

The firm's other proposed projects in Egypt include a 2,200MW combined-cycle plant at West Damietta and wind farms on the Gulf of Suez.

Egypt more attractive for renewables y-o-y, says study

Egypt has ranked 19th out of 71 countries globally in Climatescope's study of attractiveness for clean energy investment, development, and deployment.

The study moved Egypt up by 23 places compared to 2016, adding that 2017 was "a record year for clean energy financing" in the country.

Among the three Middle Eastern countries ranked by the project, Egypt ranked 2nd, after Jordan and before Lebanon.

The study "ranks countries on their past, present, and future ability to attract investment for clean energy companies and projects," with clean energy including biofuels, biomass and waste, geothermal, solar, wind and small hydro (up to 50MW).

Scores are decided based on four weighted parameters, encompassing 50 indicators. Scores range from a low of 0 to a maximum of 5, with the parameters weighted as follows:

• Enabling Framework Parameter I – 40%

• Clean Energy Investment and Climate Financing Parameter II – 30%

• Low-carbon Business and Clean Energy Value Chains Parameter III – 15%

• Greenhouse Gas Management Activities Parameter IV – 15%

Egypt improved in three of the four parameters, making the most signficant strides in Parameter II, in which it ranked 9th, up from 42nd in 2016.

This improvement was driven by $745m spent on new wind projects in 2016, it claimed, up from no renewables spending the previous year.

It is not clear where the $745m on wind projects was spent, as the Egypt Energy Monitor found that little or no spending on wind projects was actually deployed last year - or this year.

According to the report, Egypt saw $1.1bn in total clean energy spending from 2011-2015. Of its total 39.1GW in installed power capacity, 2% is provided by renewables.

Egypt's total clean energy generation is 2,091GWh, said the report, without specifying the period to which this figure applied.

The study noted that Egypt is expected to have the highest power demand in the Middle East by the mid-2020s.

It is aiming to raise capacity to 52GW from 2018-2030, with less than half of this to be provided by renewables.

The study added that, by end-2021, Egypt is expected to be 1.6GW short of the government's aim of producing 20% of power from renewables by 2022.




Climatescope is supported by the UK Department for International Development. The report is written and researched by Bloomberg New Energy Finance.

A wide range of renewables projects are underway in Egypt.

Some 30 projects reached financial closure in October for projects under the second round of the Feed-in-Tariff scheme.

The projects are being funded by various international lenders including the European Bank for Reconstruction and Development, the International Finance Corporation (IFC) and the Asian Infrastructure Investment Bank (AIIB).

Developers are waiting for the Egyptian Electricity Transmission Company (EETC) to finish its review of their project documents, which was previously expected to be concluded in December.

Infitnity Solar is expected to start operating its 50MW plant under the first FiT round by the end of this month. FAS is expected to operate its project in March.

Bids reviewed for JICA-funded distribution project

Seven technical bids are currently under review for the Japan International Cooperation Agency (JICA)-funded power distribution project in Alexandria, North Cairo, and North Delta.

Al-Husseiny al-Far, head of the electricity ministry's Distribution Companies Unit, told Al Borsa that Siemens, GE and ABB are among the bidders.

He did not name the other four firms, or say when the review process would be completed.

Tenders were issued over the summer.

Earlier this month, local press reported that JICA would disburse a JPY10.7bn ($93.8m) loan in three tranches for supporting Automated Power Control projects, which are understood to be part of the project described in the recent report.

The first tranche was expected in the second week of November, sources said at the time, adding that the new control centres would support the following distribution companies:

• North Cairo Electricity Distribution Company (NCEDC)

• Alexandria Electricity Distribution Company (AEDC)

• North Delta Electricity Distribution Company (NDEDC)

The report added that the loan had a repayment period of 30 years, a 10-year grace period, and a 0.01% interest rate.

The projects are thought to be part of the "Electricity Sector Rehabilitation and Improvement Project,” intended to support distribution improvement projects in Alexandria, North Cairo, and North Delta, for which a $396m loan was approved by the parliament in February.

The loan agreement was signed in October 2016 by international cooperation minister Sahar Nasr and Japanese ambassador Takehiro Kagawa.

JICA is funding a number of power projects in Egypt.

In June, JICA sources told the Egypt Energy Monitor that initial documents for the Alexandria, North Cairo, and North Delta had been issued.

Some 16 companies purchased the RFP documents, the sources added, saying that tenders for Alexandria and North Delta were under preparation at that time.




Minister: GERD construction to continue

The Grand Ethiopian Renaissance Dam (GERD) is 63% complete and construction work will not stop despite Egypt’s opposition, Ethiopia’s Water, Irrigation, and Electricity Minister Sileshi Bekele told a press conference this week.

“We have carried out relevant and adequate studies on our side which prove that the dam does not bring any significant impact on downstream countries," said Bekele.


Earlier this month, foreign affairs ministry spokesman Ahmed Abou Zeid said in a TV interview that President Abdel Fattah al-Sisi and Ethiopian Prime Minister Hailemariam Desalegnare would meet in Egypt in December to discuss the GERD.

A ministerial meeting was held by Egypt, Sudan, and Ethiopia in Cairo this month to continue discussions over the GERD agreement.

The ministry said at that time that Egypt was trying to convince Ethiopia and Sudan to approve the preliminary report submitted by French consultancy firms Artelia and BRL so that the remaining studies could be completed and recommendations received.

In September, the irrigation ministers of Egypt, Sudan, and Ethiopia signed contracts in Khartoum to conduct an impact assessment on the GERD.

The contracts were also signed by UK law firm Corbett, plus Artelia and BRL.

The studies were to focus on the dam's hydraulics and flow rates in addition to the project's economic and social effects on Egypt and Sudan.

Egypt has repeatedly raised concerns over the potential impact of the scheme, which is linked to a proposed 6,000MW hydroelectric plant.

The country has previously claimed that it is concerned about the impact that the GERD might have on its water supply and about the possibility that the dam might be used for purposes beyond power generation.

In March 2015, Ethiopia, Egypt and Sudan signed a broad "declaration of principles" agreement on the dam, which aims to protect the interests of downstream countries, set out a structure for resolving conflicts, and provide compensation for any damages.

Electricity ministry 'owed EGP27bn' in dues

Government bodies, water companies, and other public sector firms reportedly owe EGP27bn to the electricity ministry, unnamed sources told Al Mal.

It was not clear when exactly this figure was reached.

The sources said that 80% of the total dues are owed by government bodies, including ministries and their affiliates. They did not specify how much was owed by water and public sector firms.

The electricity ministry is in talks with these authorities over pushing back payment deadlines, said the sources, adding that power distribution firms had to cut off power for various government buildings due to unpaid dues.

It was previously reported that the electricity ministry and its affiliates were owed over EGP24bn by governmental entities, water companies, and public as well as private firms.

According to the recent report, the firms affiliated with the electricity ministry are set to spend around EGP50bn this fiscal year to produce, transmit, and distribute power.

They added that the electricity ministry itself owes the petroleum and finance ministries, as well as the National Investment Bank (NIB), a total of EGP88bn.

The sources said that EGP70bn of these dues are owed to the petroleum ministry.




In October, it was reported that the electricity ministry owed the petroleum ministry EGP76.3bn in dues as of September.

The finance ministry is reportedly to pay EGP15bn of this amount on the electricity ministry's behalf.

It was previously reported that the finance ministry pays for 50% of the fuel consumed by power plants. It provided some EGP5.2bn in emergency funds in June 2016 to cover the electricity ministry's fuel payments.

No official announcement has been made on the exact amount of dues owed by the electricity to the petroleum ministry.

Electro Cable reports further losses

Pioneers Holding subsidiary Electro Cable Egypt (ECE) posted EGP12.2m in after-tax net losses during 9M 2017, compared to a EGP33.6m loss during the same period of 2016, according to an EGX statement released by the firm.

It was not clear from the statement what caused the losses, and no further details were provided.

ECE posted a net loss of EGP22.5m in Q1 2017, compared to a net loss of EGP7.9m in Q1 2016, according to the firm’s consolidated financial statement.

In October 2016, the firm decided to raise its issued capital from EGP521m to EGP547m.

The decision was driven by the firm's strong profits in 2015, chairman Mohamed Zakaria Mohie el-Din said at the time.

In September 2016, the company was reportedly planning to resume exports in 2017 in order to access foreign currency to import production material.

The firm provides power and telecommunication cables for local markets and export.

Power distribution maintenance to cost ‘EGP8bn’

The electricity ministry's annual plan for maintaining the power distribution network is expected to cost EGP8bn in total, al-Husseiny al-Far, head of the electricity ministry's Distribution Companies Unit, told Al Borsa.

Al-Far added that the plan is expected to be completed by the end of April. It is not clear when it started.

According to al-Far, the scheme includes the following:

• Renovating/upgrading distribution boards

• Improving the performance of main power lines

• Building new power distributors and medium-voltage distribution feeders

• Boosting power networks in cities and villages

• Maintaining power distribution kiosks

• Replacing cables and power lines


In March, local press reported that electricity ministry had finished maintenance on 155 power production units, with a total capacity of 29GW, in preparation for the peak summer months.

Unnamed sources said at the time that the maintenance work was 90% complete.




In February, a similar report said maintenance had been completed on 139 power production units, with a total capacity of 27GW with the remainder set to be completed by end-April.

Maintenance work was reportedly being carried out by a number of private sector companies including Siemens and General Electric (GE).

In January, local press reported that the Ministry of Electricity had set a budget of EGP11bn for the operation and maintenance of production and transmission networks in 2017.

Al-Far said at that time that the cost of maintaining power networks, substations and cables would be EGP1.2bn, subject to increase due to the currency flotation.

OIL, GAS, FUEL AND PETROCHEMCIALS

Zohr still on track for end-2017 start-up

Total spending on the first phase of the Zohr field is expected to reach $5bn by the end of the year, with output still set to start next month, a source familiar with the project told the Egypt Energy Monitor.

The figure suggests that spending is expected to have risen by 25% on August, when the chairman of the Belayim Petroleum Company (Petrobel), Atef Hassan, said it was $4bn.

The source said that the first phase will start producing at a rate of 500-700 million cubic feet per day (mcfd) by the end of December, rising to 1.2 billion cubic feet per day (bcfd) before the end of March.

According to a separate Amwal Al Ghad report, petroleum minister Tarek el-Molla confirmed that Zohr is expected to produce 2.7bcfd by end-2019.


There have been conflicting reports on when Zohr might start production and at what volume, and some uncertainty on the timeline remains.

Earlier this month, El-Molla said that Zohr was set to enter production by end-2017 at around 350 mcfd.

Eni announced last month that the field was "on track for December start up," without providing details on the expected start-up production rate or whether gas output would come online as expected.

Also last month, Prime Minister Sherif Ismail said that Zohr was expected to produce 500 mcfd by end-2017, while el-Molla said during a visit to the field that work on the first phase was 91% complete.

According to the original schedule for Zohr, the first six wells were to enter production by end-2017 and produce around one bcfd.




PMS installs offshore platform for GPC

Local firm Petroleum Marine Services (PMS) has reportedly finished installing the 600-tonne NAO offshore platform in the Gulf of Suez for the General Petroleum Corporation (GPC), an unnamed GPC source told Youm7.

The source added that the GPC is planning to start operations at the NAO platform and the HH offshore platform, which is also located in the Gulf of Suez, by end-2017.

This suggests that there has been a significant delay to the project timeline, with GPC Chairman Mustafa Taher having said in May that the platforms would start operations by the end of that month.

Taher added at that time that the two platforms were expected to raise production by 9,500 barrels of crude per day and would be connected to five new wells in the Amer field.

The HH platform was to be connected to three wells that were expected to produce around 3,500 bpd, while the four-legged NAO platform was to be connected to two wells that were expected to produce 6,000 bpd, said Taher.

Three more wells were to be drilled in future, bringing the total to nine, with four to be connected to the NAO platform and five to the HH platform at a total cost of around $74m, Taher added.

In addition, a 6-inch-pipeline would run 8km between the two platforms to Amer Platform 8, while an 8-inch pipeline would transport crude from Amer 8 to the North Amer crude processing plant.

The NAO and HH project is managed by an Enppi-led consortium of petroleum sector firms, which also includes Petrojet and Petroleum Marine Services.

Enppi is responsible for carrying out technical works, including design, supply, and engineering management.

Petrojet will supply and fabricate the metal structure for the platform, while PMS was to carry out marine transport and mechanical works for the platform and pipeline.

Established in 1957, state-owned GPC is an E&P firm with concession areas in the Eastern Desert, Gulf of Suez, Western Desert and Sinai.

Aramco to start refining crude in Egypt by Q1 2018

Saudi Aramco will start refining crude in Egypt in the first quarter of next year, an unnamed petroleum ministry source told Al Shorouk.

The source said that negotiations over volumes are currently ongoing with the Saudi firm, with the oil to be processed at Egyptian refineries with spare capacity.

Part of the negotiations involve refining Aramco crude at the Middle East Oil Refinery (MIDOR), as previously reported.

Egypt will receive some of the refined products as part of the existing fuel supply contract with Aramco, added the source, while the rest will be exported.

It is understood that the source was referring to the five-year fuel supply deal that was agreed last year with Aramco, which involves providing 700,000-tonne monthly shipments of fuel, including diesel, gasoline and LPG.





Last month, it was reported that Aramco had signed contracts "weeks ago" with MIDOR to refine crude shipments. It was not clear when the contracts were signed, but sources said that Aramco would start supplying the crude shipments in November.

Sources said at the time that the agreement involved supplying the products refined at MIDOR - including refined fuel oil, diesel, and 90/92 octane gasoline - to the Egyptian General Petroleum Corporation (EGPC).

Aramco would also sell other refined products directly to Egyptian customers, said the sources, adding that the firm would sell jet fuel directly to Egyptian and foreign customers.

The values and quantity of the supplied shipments were to be announced by the petroleum ministers of both countries in the future, added the sources, without specifying when.

MIDOR is a state-controlled entity that owns and operates a 100,000-bpd design capacity refinery in Alexandria.

The refinery is supplied with crude from the Sidi Kerir terminal, which is connected to the Arab Petroleum Pipelines Company (SUMED) pipeline, according to MIDOR's website.

In March, Egypt's petroleum ministry announced that Aramco would resume fuel shipments after having suspended deliveries in October.

IFC disbursing $75m Apex loan

The International Finance Corporation (IFC) has changed the status of its $75m equity loan to Apex International Energy from “pending signing” to “disbursing,” according to the bank’s project documents.

The documents said that the loan was signed on 10 November, after having been approved by the IFC in August.

The funding is expected to support Apex’s $500m project to “build an exploration and production business of scale through asset acquisitions and capital investments in drilling, infrastructure, production enhancement and exploration to deliver long-term profitable growth in production and reserves,” the bank said.

Specifically, the IFC loan will support the following areas:

• Corporate G&A

• Acquisition of oil and gas assets

• Early development of assets and exploration activities in newly-acquired blocks

Apex is a recently established independent oil and gas E&P firm focused in Egypt and backed by global private equity company Warburg Pincus.

In 2016, Warburg Pincus arranged a $500m equity line to finance Apex’s project.

US-based Warburg Pincus is focused on growth investing and provides a wide range of services related to communications, political risk, global policy, regulatory issues, and information technology strategy.

It is not clear which other banks may be providing loans for the project.

In August, petroleum minister Tarek el-Molla signed two exploration agreements with Apex for Blocks 8 and 9 in the Western Desert.

Blocks 8 and 9 are located in the Abu Gharadig Basin in the Western Desert and cover 6,714 sq km.

Block 8 is in West Badr El-Din and covers 4,180 sq km, while Block 9 is in South-East Maleeha and covers 2,535 sq km.

Apex won the exploration agreements as part of the 11-block tender issued by the petroleum ministry last year.




In July, Parliament approved five exploration agreements between the Egyptian General Petroleum Corporation (EGPC) and international oil companies that were part of the 11-block tender issued by the petroleum ministry last year.

The agreements included Apex and Shell's blocks, in addition to the North West al-Razaq and South Alam el-Shaweish blocks that were awarded to Apache.

KIMA 2 now 75% complete

The Egyptian Chemical Industries Company's (KIMA) EGP11bn KIMA 2 facility is now 75% complete, according to an EGX statement released by the firm.

The update followed a visit to the Aswan facility by Chemical Industries Holding Company (CIHC) chairman Yasser El Naggar.


In October, El Naggar said that the facility was 73% complete. He had previously said that all work on KIMA 2 was set to be finished in 2018.

In September, he said that imported equipment for KIMA 2 had finally been released from Alexandria Port customs, where it was held for months.

That same month, KIMA announced that it would use EGP202m in stock revenues from Abu Qir Fertilisers and the Delta Sugar Company to fund KIMA 2.

In August, El Naggar said that CIHC was set to conclude negotiations with banks by the end of August to refinance loans for the KIMA 2 facility, so that loans would cover 63% ($240m) of the cost, up from 51.5% ($181m).

He added that the talks also involved providing EGP800m in funding to KIMA, without specifiying whether this was included in the $240m figure.

The banks providing the loan are a consortium of Banque Du Caire, the National Bank of Egypt (NBE), Banque Misr, and the Arab African International Bank (AAIB).

In July, El Naggar said that the facility had cost over EGP10bn so far.

The project, which is located at the existing site of the company's Aswan fertiliser complex, was originally set to cost $797m over two phases.

The first $658m phase was to involve building two ammonia production units, while the second $139m phase was to renovate the existing facility.

Established in 1956, KIMA is a state-controlled company producing nitrogenous fertilisers and chemicals, including hydrogen and ammonia. The company owns a chemicals factory on a 1,100 acre site near Aswan.

State-owned CIHC is a major shareholder in 19 chemical and petrochemical firms including KIMA, El Nasr Company for Fertilisers & Chemical Industries, and Delta Company for Fertilisers.

Zohr first phase ‘96% complete’

Work on the first phase of the Zohr field is now more than 96% complete, an unnamed source told Youm7.

The source added that the field is expected to start production between 15 and 21 December at a rate of 350 million cubic feet per day (mcfd) from three production wells, with production to rise to 1.2 billion cubic feet per day (bcfd) by the end of H1 2018.


There have been conflicting reports on when Zohr might start production and at what volume, and some uncertainty on the timeline remains.




Earlier this week, a source familiar with the matter told the Egypt Energy Monitor that total spending on the first phase of the field was expected to reach $5bn by the end of the year, with output set to start next month.

The source said that the first phase would start producing at a rate of 500-700 mcfd by the end of December, rising to 1 bcfd before the end of March.

According to a separate report this week, petroleum minister Tarek el-Molla confirmed that Zohr was expected to produce 2.7 bcfd by end-2019.

Earlier this month, El-Molla said that Zohr was set to enter production by end-2017 at around 350 mcfd.

Eni announced last month that the field was "on track for December start up," without providing details on the expected start-up production rate or whether gas output would come online as expected.

Also last month, Prime Minister Sherif Ismail said that Zohr was expected to produce 500 mcfd by end-2017, while el-Molla said during a visit to the field that work on the first phase was 91% complete.

According to the original schedule for Zohr, the first six wells were to enter production by end-2017 and produce around one bcfd.

Shell, Cyprus 'negotiating gas pipeline cost'

Shell is in talks with Cyprus over the cost of the proposed gas pipeline between the island's offshore Aphrodite field and Egypt's Idku LNG plant, a source familiar with the project told the Egypt Energy Monitor.

The Egyptian government will not contribute to the cost of the project, the source added.

Feasibility studies on the pipeline are understood to have been completed by a consultant, with the petroleum ministry having agreed that the pipeline would link directly to the Idku plant.

Cyprus and Egypt are expected to begin more detailed discussions in December over the terms of the project.

The new pipeline would partly use an existing system that connects Egyptian gas fields to the Idku and Damietta LNG plants.

An early-stage agreement had previously been signed to send gas from Cyprus' Aphrodite field to LNG plants on Egypt's North Coast, while another pipeline from Israel's Leviathan field to Egypt's LNG facilities is also possible.

Earlier this month, the general manager of the state-owned Cyprus Hydrocarbons Company (CHS), Panos Kelamis said that the firm was working with Shell, Delek, and Noble on plans to export gas to Egypt from the Aphrodite field and that a decision would be announced soon.

Earlier this week, Eni CEO Claudio Descalzi said that the potential Eastern Mediterranean gas pipeline, which is under discussion by Italy, Egypt, Cyprus, and Greece, could involve processing Cypriot gas at Egypt's LNG plants for export to Europe or supplying Cyprus' domestic demand.

Cyprus, Egypt, Greece, and Italy will meet in early December to sign an MoU for the EU-supported pipeline project.

It was confirmed last month that Cyprus was still considering sending gas from recently signed blocks, which include Block 6, to Egypt's Idku and Damietta LNG plants via pipeline.

If gas from the Cyprus blocks were sent to Egypt, the deal would likely to allow Egypt to either consume the gas domestically or export it, with further details to be defined later.




Petrojet signs MoU with NPCC

State-controlled contractor Petrojet has reportedly signed an MoU with the Abu Dhabi-based National Petroleum Construction Company (NPCC) to partner on projects in Egypt and other countries, according to the state-owned Emirates News Agency.

The MoU was signed by Petrojet chairman Salah Ismail and NPCC CEO Aqeel Madhi and will enter into effect immediately.


NPCC, established in 1973, is an EPC firm providing services to the offshore and onshore oil and gas sectors. It has an office in Egypt.

Last month, Petrojet reportedly finished work on the first section of the Arab Petroleum Pipeline Company (SUMED) LNG platform at Ain Sokhna, after four months.

Petrojet's scope of work at the project involved carrying out and installing 74 sections with a total weight of 3,900 tonnes.

Petrojet's core activities include the construction of industrial plants, oil refineries, oil and gas production facilities, gas processing and liquefaction, onshore field development, and onshore pipelines.

Fuel oil consumption falls further

Power generated from natural gas rose by 7.7% y-o-y in September up to 12,872 GWh from 11,954 GWh, according to the latest data released by the Egyptian Electric Utility & Consumer Regulatory Agency (Egyptera).

In contrast, power produced from fuel oil fell by 14.5% y-o-y to 3,077 GWh in September.

These figures confirm a continuing downward trend in the use of fuel oil, as a number of new offshore fields come online earlier than projected this year, raising Egypt's domestic production and reducing the need for LNG imports.

In recent years, power plants had reportedly come to rely on fuel oil for up to 25% of needs, due to the lack of gas supply.

Fuel oil typically has an adverse effect on power plant equipment, in addition to being more expensive and worse for the environment.

Power produced from renewables fell by 21.3% y-o-y in September, down to 251 GWh from 319 GWh during the same period of 2016.

This figure rose by 4.1% m-o-m in September, up from 241 GWh in August.

The power production high rose slightly by 2.6% on an annual basis, up to 621 GWh from 605 GWh in September 2016.

The power production low also rose by 3.6% y-o-y, up to 516 GWh from 498 GWh.

The lowest low load rose by 1.6% on a yearly basis, up to 18,520 GWh from 18,220 GWh in September 2016.

The highest low load also rose by 3% on a yearly basis, up to 22,250 GWh from 21,590 GWh.

The highest peak load rose by 2.4% on a yearly basis, up to 29,400 GWh from 28,700 GWh, while the lowest peak load rose by 1.6% y-o-y to 24,700 GWh from 24,300 GWh in 2016.

El-Molla meets chairman of Libya's NOC

Petroleum minister Tarek el-Molla met in Cairo with the chairman of Libya's National Oil Corporation (NOC), Mustafa Sanalla, on 28 November, according to Libyan media.

They discussed potential joint projects and how the ministry's subsidiaries can support the technical needs of Libya's oil sector by renovating oil and gas network infrastructure, as well as building and maintaining new fuel tanks.

The leaders also discussed Egyptian firms providing services to Libya, including technical and training services, and agreed to hold the first joint meeting of specialised technical committees in January.





In April, the NOC hosted a delegation from the Egyptian General Petroleum Corporation (EGPC) to discuss bilateral ties in the energy sector, at which point the two parties agreed to form a work team to study potential joint projects.

That meeting was attended by Sanalla, EGPC CEO Abed al-Milahy, EGPC chairman Salah Ismail Hamed, Al Jowfe Oil Technology Company chairman Majdi al-Dersi, and NOC investment department head Fathi Madi.

Egypt is a backer of the eastern-based Libyan authorities. The NOC has attempted to remain largely neutral in the ongoing political conflict in the country.

For more information on the Libyan energy sector, please see Frontier's Libya Monitor service at www.libyamonitor.com

Fuel imports down y-o-y in August

The number of LNG ships passing through the Suez Canal rose by around 41.2% on a monthly basis in October, up to 48 from 34 in September, according to figures released by the Suez Canal Authority (SCA).

This figure also rose slightly on a yearly basis, up by 2.1% from 47 ships in October 2016.

Meanwhile, the number of tankers passing through the canal rose by 12.3% y-o-y, up to 392 from 349 in October 2016.

It also rose on a monthly basis, up from 383 in September.

The total number of vessels rose by 7.8% on a yearly basis, up to 1,552 in October from 1,440 during the same period of 2016.

This figure was also up by 6.5% m-o-m from 1,457 in September.

LNG tonnage jumped by 40% m-o-m in October, up to 5.1 million tonnes from 3.7 million during September.

The figure also rose by 8.6% on a yearly basis, up from 4.7 million tonnes during October 2016.

Tanker tonnage was up by around 12% on a yearly basis at 16.5 million tonnes in October, compared to 14.8 million during the same month last year.

This figure also rose by 3.9% m-o-m, up from around 16 million tonnes in September.

Total tonnage passing through the canal rose 14% y-o-y, up to 93 million tonnes in October from around 82 million during the same period of last year.

This figure also rose by 6% on a monthly basis, up from around 88 million tonnes in September.

Egypt inaugurated its $8bn Suez Canal expansion in August 2015, which aimed to increase traffic and revenues.

In December, SCA said in a statement that it would introduce a year-long extension of Circular 3 of 2016, which stipulates discounted tolls for very large crude carriers (VLCCs) carrying more than 250,000 DWT.

The authority said that the new tolls, which were introduced in June initially for a six-month period, would be extended until 31 December 2017.

A month later, SCA reduced transit tolls for VLCCs coming from the US to the Arabian Gulf by 45%, excluding other services, in ballast of 200,000 DWT.

Previous information published by the SCA suggested that VLCCs previously paid a minimum of $200,000 for the south-north transit, suggesting that the authority is seeking to boost traffic through the canal.

There have been reports that greater numbers of tankers have been going round southern Africa instead of using the waterway, as a result of continued low oil prices and the high costs of using Suez.

Overall fees and traffic have been below expectations since the launch of the canal's extension.




Apex appoints CFO

Apex International Energy has appointed Robert Milius as its Chief Financial Officer (CFO), according to a statement released by the firm.

Before joining Apex, Milius was based in Dubai as a managing director and head of the Natural Resources Group for the MENA Region at Barclays.

Prior to that he worked for 11 years at Lehman Brothers, as managing director in the Global Natural Resources Group.

He has also worked as the head of the International Energy Project Finance Group.

Apex is a recently established independent oil and gas E&P firm focused in Egypt and backed by global private equity company Warburg Pincus.

Earlier this month, a $75 million equity loan from the International Finance Corporation (IFC) to Apex was pending signing.

The loan was approved by the IFC in August.

The funding is expected to support Apex’s $500m project to “build an exploration and production business of scale through asset acquisitions and capital investments in drilling, infrastructure, production enhancement and exploration to deliver long-term profitable growth in production and reserves,” the bank said.

In August, petroleum minister Tarek el-Molla signed two exploration agreements with Apex for Blocks 8 and 9 in the Western Desert.

Blocks 8 and 9 are located in the Abu Gharadig Basin in the Western Desert and cover 6,714 sq km.

Block 8 is in West Badr El-Din and covers 4,180 sq km, while Block 9 is in South-East Maleeha and covers 2,535 sq km.

Apex won the exploration agreements as part of the 11-block tender issued by the petroleum ministry last year.

In May, Apex hired Raed Saba as Deputy General Manager and Exploration Manager in Cairo and Willis "Trey" Gilmore as Vice President of Corporate Reservoir Engineering in Houston.

Egypt Gas board approves New Capital contracts

The board of Egypt Gas has approved signing unspecified contracts with the New Administrative Capital under the supervision of the Egyptian Natural Gas Holding Company (EGAS), according to an EGX statement submitted by the firm.

No further details were provided, although the contract is likely to involve building mains gas networks in the New Capital.

Egypt Gas is an EGAS subsidiary and is involved in building distribution networks for residential and commercial clients.

It also designs and builds LPG filling stations and storage facilities.

Last month, natural gas was reportedly delivered to the New Capital after Cairo Gas finished construction work on a mains gas pipeline.

Cairo Gas carried out the gas pipeline project jointly with two public sector firms, said an unnamed source, without specifying which firms.

The source added that infrastructure work related to gas supply in the city had also been finished.

Work on the New Capital has been heavily delayed, although an initial phase consisting mainly of government and military-related buildings and housing is under construction.

Various phases are planned, with the city ultimately expected to house tens of thousands of people and an array of public-sector ministries, hotels and other land uses.




Eni gives further details on Cyprus drilling plans

Italy's Eni is planning to drill two exploration wells off Cyprus in December and January, said CEO Claudio Descalzi after talks with Cypriot President Nicos Anastasiades, according to various reports.

The first well will be drilled with France's Total in December off Cyprus' southwest shore, while the second well will be drilled in January with South Korea's Korea Gas Corporation (KOGAS) off the southeast shore, said Descalzi.

Anastasiades added that the first well is called Kalypso and will be drilled in block 6, while the second is called Cuttlefish and will be in block 3.

Descalzi added that the potential Eastern Mediterranean gas pipeline, which is under discussion by Italy, Egypt, Cyprus, and Greece, could involve processing Cypriot gas at Egypt's LNG plants for export to Europe or supplying Cyprus' domestic demand.

Cypriot energy minister Giorgos Lakkotrypis said that Descalzi and Anastasiades talked about Eni potentially working on a project to transfer gas to Egypt, without specifying the project to which he was referring.

He added that talks would continue over the project among officials from the involved firms, but did not provide any further details.

Earlier this month, Anastasiades said that Total and Eni were planning to begin drilling at Block 6 by end-2017 or early 2018, despite "disappointing" results at Block 11.

It was confirmed last month that Cyprus was still considering sending gas from recently signed blocks, which include Block 6, to Egypt's Idku and Damietta LNG plants via pipeline.

If gas from the Cyprus blocks were sent to Egypt, the deal would likely to allow Egypt to either consume the gas domestically or export it, with further details to be defined later.

Last week, it was announced that Cyprus and Egypt would begin discussions in December over a deal to build a proposed offshore gas pipeline.

An early-stage agreement had previously been signed to send gas from Cyprus' Aphrodite field to LNG plants on Egypt's North Coast, while another pipeline from Israel's Leviathan field to Egypt's LNG facilities is also possible.

The new pipeline will partly use an existing system that connects Egyptian gas fields to the Idku and Damietta LNG plants.

Cyprus, Egypt, Greece, and Italy will also meet in early December to sign an MoU for an EU-supported project to build a pipeline connecting eastern Mediterranean gas fields to Italy through Cyprus and Greece.

Also this month, the general manager of the state-owned Cyprus Hydrocarbons Company (CHS), Panos Kelamis said that the firm was working with Shell, Delek, and Noble on plans to export gas to Egypt from the Aphrodite field and that a decision would be announced soon.

Israeli gas imports 'still on table'

Petroleum minister Tarek el-Molla told Israeli energy minister Yuval Steinitz last week that importing Israeli gas to Egypt is still a possibility, an unnamed source told Bloomberg.

El-Molla said that any progress would depend on resolving the disputes related to the April ruling of a Swiss court, which said that Egypt must pay Israel $2bn in compensation for backing out of a previous gas deal.




No official statements have been released on the issue, but negotiations are thought to have been taking place behind the scenes in a bid to reach a deal.

Earlier this month, el-Molla said that Egypt would not issue licenses to firms to import gas from Israel or sign Israeli import agreements as long as arbitration cases with Israeli companies were ongoing, adding that any new import agreements would also have to "add value."

The International Chamber of Commerce ruled in 2015 that Egypt pay $2bn in compensation after it backed out of an agreement to supply gas to Israel through a Sinai pipeline owned by Eastern Mediterranean Gas (EMG).

The EMG pipeline was forced to close in 2012 after coming under increasingly frequent attacks by militant groups.

There has since been an ongoing dispute over the issue, with Egypt disputing the ruling and various Israeli companies seeking compensation from Egypt over the suspension of the supplies.

The dispute is also part of wider ongoing negotiations over a possible plan to export future Israeli offshore gas to Egypt, which has the LNG processing capacity that Israel lacks.

Earlier this month, the Egyptian Court of Cassation turned down an appeal made by EMG against a 2016 ruling that it should repay $174m in dues owed to the National Bank of Egypt (NBE).

However, the court approved an appeal made by the Egyptian Insurance Company, which was EMG's guarantor for the NBE funds and was reponsible for risks such as terrorism and political violence.

EGX Updates (ELMACO, Egypt Gas & more)

• Maridive and Oil Services issued a statement regarding a delay in delivering its consolidated financial statments for the period ended on 30 September.

• El Nasr Transformers and Electrical Products (ELMACO) posted its 28 November Board of Directors (BoD) decisions.

• Egypt Gas released its 27 November Board of Directors (BoD) decisions.

• Elsewedy Electric posted three statements:

1. The EGX decided to suspend trading on Elsewedy until the firm answers inquiries about its €500m wind plant

2. Elsewedy reponded saying that it is still in negotiations with the New and Renewable Energy Authority (NREA)

3. The EGX decided to resume trading on the company

• Egypt Gas released its Central Auditing Organization report for the period ended on 30 September.

• Misr Chemical Industries (MCI) posted its 23 November Board of Directors decisions.

• El Nasr Transformers and Electrical Products (ELMACO) issued two statements:

1. One saying that the Listing Committee decided on 22 November to ask the firm to send a Central Auditing Organization (CAO) report.

2. The CAO report for the period ended on 30 September.

• The Egyptian Chemical Industries Company (KIMA) announced that its EGP11bn KIMA 2 facility is now 75% complete.






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