Thursday, March 09, 2006

Egypt exports natural gas to Europe and Israel.


****This is an interesting subject to read, because it shows the way ahead for the Egyptian economy. In Egypt now, economy and employment are vital elements for the country's internal stability. The big question is: What would be the position of a group like the Moslem Brothers regarding the export of natural gas to israel?

The article discusses the establishment of Tir Gaz company between Egypt and Turkey. This company will be responsible for exporting Egyptian gas to Europe via a pipeline which will go from Egypt to Jordan, and then through Syria to Turkey.

Natural gas production in Egypt grew by more than 75 percent in the last five years. In 2004, natural gas became the nation's No. 1 source of energy. Currently, approximately 84 percent of Egypt's electricity needs are supplied by power stations that run on natural gas.
Many leading foreign companies understood the potential of Egypt's natural gas industry and today there are some 50 foreign companies operating in this sector.

Egypt has become the world's sixth largest liquid gas exporter, following Indonesia, Qatar, Malaysia, Algeria and Nigeria.

Egypt has also been striving to become a regional gas exporter, supplying gas by pipelines to neighboring Jordan and from there to Syria, Lebanon and Turkey, as well as to Israel.

The idea of selling gas to Israel, something which has been under discussion since the mid 1990s, seems quite viable. Israel, claimes Tarek Heggy, the known Egyptian economist and thinker, has always been Egypt's best export destination for its newly discovered natural gas reserves. This is the largest industrialized economy in the region and hence also the largest natural gas consumer in the region in the foreseen future. Furthermore, Israel is close to Egypt, making it much cheaper and simple to sell it the gas by a relatively short pipeline.

Israel, however, explained Heggy, has been reluctant to base its energy supplies on neighboring Egypt and Egypt, on the other hand, has been reluctant to become dependent of Israeli dollars. Eventually, however, in June 2005, a deal was signed between the two sies for the supply of $2.5 billion worth of gas to Israel. The gas would be exported to Israel by the East Mediterranean Gas Company (EMG), an Egyptian-Israeli company, through a pipeline which is to be built and fully operated by the end of 2007.