Russia-Ukraine war, here are joys and sorrows for Egypt
Rising gas prices are guaranteeing huge revenues for Egypt. The country, however, is affected by the rise in oil and grain prices. All the details
The European Union has painstakingly found an agreement to ban almost all oil imports from Russia : the goal is to deprive the Kremlin of a very significant source of revenue, which also allows it to finance the aggression against Ukraine. Natural gas, another essential hydrocarbon for Moscow's coffers, would remain to be banned, but Brussels is very dependent on Russian supplies and would not be able to replace them completely and quickly.
ENERGY CRISIS AND SEARCH FOR ALTERNATIVES
European governments are therefore looking for alternatives: Italy, for example, focuses above all on Algeria and liquefied gas . The war in Ukraine, meanwhile, aggravated the pre-existing energy crisis and caused a further increase in gas prices. Europe is in trouble, but some exporting countries are benefiting from this situation.
HOW MUCH DOES EGYPT COLLECT
In Egypt, for example, revenues from gas exports in the first four months of 2022 alone amounted to 3.9 billion dollars: it is a value equal to that achieved in the whole of 2021, and 768 percent higher than that registered in 2020.
AGREEMENTS WITH ENI AND PROJECTS WITH GREECE AND ISRAEL
As reconstructed by Quartz , in 2015 Egypt discovered one of the largest offshore natural gas fields in the entire Mediterranean region, Zohr: in 2020 it reached a gross production capacity of 87 million cubic meters per day. The country seems destined to become a very important player in the international liquefied gas market thanks to the Idku and Damietta plants (owned, in part, by Eni ).
Last April Egypt signed an agreement with Eni on increasing gas production and exports. The country is also carrying out an electricity interconnection project with Greece , to supply the country and Europe with electricity generated from renewable sources (wind and solar).
According to an official document viewed by Bloomberg , the European Union is working on a plan to import Israeli gas via Egypt. At the moment, however, the gas extracted in Israel is mostly used to meet national needs and those of Egypt and Jordan: it is not clear whether the country has sufficient reserves to send to Europe.
BENEFITS AND COSTS
Despite the rich gains obtained from the sale of gas, the Egyptian authorities say that they may not be enough to offset the increase in the cost of imports. The country is in fact a large oil importer and one of the largest buyers of wheat in the world (the war between Russia and Ukraine involves two of the main exporters of the cereal).
The Egyptian government is concerned about the rising price of bread, a staple commodity heavily subsidized by the government to make it accessible to the majority of the population. Quartz writes that the high cost of bread was one of the factors that triggered the 2011 revolution, which led to the fall of Hosni Mubarak's government.
Due to the war – Reuters reported in mid-May – about 300 thousand tons of Ukrainian wheat booked by Egypt with delivery for February and March have yet to be shipped: one lot is stopped in port, while the other four have yet to be loaded onto the ships.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/egitto-gas-naturale-grano/ on Tue, 07 Jun 2022 09:46:20 +0000.