Egypt became the Arab World’s biggest liquified natural gas (LNG) exporter in the second quarter (Q2) of 2021, according to a report issued by the Organization of Arab Petroleum Exporting Countries (OAPEC).
The transcontinental country spanning the northeast corner of Africa and southwest corner of Asia, exported LNG estimated at $1.4 million tons during Q2 compared to non-exports during the same period in 2020 due to lower prices in global spot markets.
The report attributed the growth to the restarting of the 6.75 bcm/year (5 Mt/year) Damietta LNG plant in northern Egypt, a plant that sat idle for more than eight years amid legal disputes. The first LNG cargo was carried out on 22 February 2021. Since resuming production, Damietta LNG plant which is 50% owned by Italy’s Eni, has exported 12 cargos and it is expected to export the same number of shipments during H2 2021 based on the international prices, the report elaborated.
This is besides the continuous operation of Idku, the other LNG plant on Egypt’s northern coast,
Idku LNG plant at a capacity of 7.2 mmt/y.
As Africa’s second-largest producer in 2019, Egypt is also expected to become one of top global exporters of liquefied natural gas by the end of 2021, according to The Africa Report.
With its production back on track the country has interesting opportunities both as a producer and a gas liquefying actor in the East Mediterranean, a key region for the supply of natural gas, a fundamental resource for the energy transition.
McKinsey’s ‘Global gas outlook to 2050’ report says that gas will be the strongest-growing fossil fuel and will increase by 0.9% from 2020 to 2035.
Meanwhile, the Arab countries’ total global market share of the world’s exports of liquified natural gas (LNG) amounted to 30% during Q2 2021, with total exports growing by 11.9% (YoY) to 28.3 million tonnes in Q2 2021, versus 25.3 million in Q2 2020, the OAPEC report showed.
Higher exports from Qatar, Algeria, Egypt contributed to this growth, as well as LNG plants in the UAE and Oman that maintained operations with full capacity.
Qatar’s LNG exports increased by 3.7% YoY to 19.6 million tonnes in Q2 2021 while Alegria’s exports of LNG grew 6.9% YoY to 3.1 million tonnes during the same period.
Oman’s LNG exports stood at 2.6 million tonnes, up 23.8% YoY and the UAE’s exports reached 1.6 million tonnes in Q2 2021.
As the hydrogen race has begun all over the world, the OAPEC report highlighted the growing number of the Arab Countries interested in hydrogen production projects to seven countries, namely the UAE, Alegria, Saudi Arabia, Iraq, Egypt, Oman, and Morocco.
Indeed, Saudi Arabia plans to Rule the $700 billion hydrogen market, according to Bloomberg. The kingdom is building a $5 billion plant to make green fuel for export and lessen the country’s dependence on petrodollars.
For most of the countries in the region, solar resources are abundant and many of them also have wind resources, which gives them a geographical advantage to embark on the production of green hydrogen.