Italian energy giant Eni and partners signed a series of agreements to resolve disputes over the closed Damietta liquefaction plant in Egypt.
According to Eni, the deals pave the way for the restart of the Damietta plant by the first quarter of 2021.
The firm inked deals with the Egyptian General Petroleum Corporation (EGPC), the Egyptian Natural Gas Holding Company (EGAS) and the Spanish company Naturgy.
SEGAS, the owner of the liquefaction plant, is a joint venture where Eni has a 40% stake through Union Fenosa Gas (50% Eni and 50% Naturgy).
The plant has a capacity of 7.56 billion cubic meters per year, but has been idle since November 2012.
The new agreement follows a deal reached by the companies earlier this year but this deal fell through in April as certain conditions were not met.
Subject to the authorization of the European authorities, the deal will allow Eni to increase its LNG portfolio and strengthen its gas foothold in the Eastern Mediterranean, the firms said.
Naturgy payment and departure
The completion of the transaction will result in Naturgy’s departure from Egypt and the end of its joint venture with Eni.
In a separate statement, Naturgy said it would receive a series of cash payments totaling around $600 million under the new deal.
Additionally, Union Fenosa Gas’ shares in the Damietta plant will go 50% to Eni and 30% to EGAS.
The resulting shareholding of SEGAS will therefore be Eni 50%, EGAS 40% and EGPC 10%.
Furthermore, Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights.
This means increasing the volumes of LNG in Eni’s portfolio by 3.78 billion cubic meters per year, which will be available on an FOB basis, with no destination restrictions.
As per Union Fenosa Gas’ assets outside Egypt, Eni will take over the commercial activities of natural gas in Spain, strengthening its presence in the European gas market.
