Marc-Antoine Eyl-Mazzega, Director European Parliament, Strasburg, 11 Septembre 218 Centre Energie - Centre for Energy East Mediterranean gas: key factor of stability?
Egypt s population is booming, so is electricity demand, fueling energy insecurity in past years 199 1993 1996 1999 22 25 28 211 214 217 22 223 226 229 232 235 238 241 244 247 25 TWh Evolution of Egypt s population, 199-25e Total Electricity Consumption (TWh) & GDP ($Bn) 18 25 35 16 14 12 1 8 6 4 2 2 15 1 5 3 25 2 15 1 5 $billion Source: UN. World Population Prospects 217 Total population (Thousands) Source: IEA, World Bank Total electricity consumption GDP Bn $ 2
Booming urban population: challenge of sustainable cities Population in 215, 225 and 235e (in million) Source: UN World Urbanization Prospects 218 3
Egypt s CO2 emissions rising 25 Carbon Dioxide Emissions, 27-217 (Mt) 2 15 1 5 27 28 29 21 211 212 213 214 215 216 217 Carbon dioxide emissions (Mt) BP Statistical Review June 218 4
Energy mix dominated by oil and gas, based on domestic resources and some imports Egypt s energy mix (Mtoe), 217 Hydro 3% Renewables 1% Oil 43% Gas 53% BP Statistical Review june 218 5
Egypt suffered from the decline in domestic oil and gas production 7 Egypt s gas production and consumption trends, 27-217 (Bcm) 1 Comparison of Egypt s and emerging economies GDP growth (%), 27-217 6 5 9 8 7 4 6 5 3 4 2 1 3 2 1 27 28 29 21 211 212 213 214 215 216 217 Gas production Gas consumption Source: BP Statistical Review June 218 27 28 29 21 211 212 213 214 215 216 217 Egypt Average low&middle income economies Source: World Bank 6
Gas-dominated electricity mix key challenge as Egypt became net importer of gas Split of natural gas consumption by sector, 216 Egypt s Electricity Mix (TWh), 217 Hydro 7% Renewables 1% Oil 14% Transport 1% Residential 4% Chemical/Petro chemical 11% Industry 12% Energy industry own use 1% Power Sector 62% Egypt s power sector consumed 33 bcm in 217, similar to Italy s power sector Gas 78% BP Statistical Review june 218 7
Egypt undergoing painful but necessary economic reforms, including progressive removal of energy subsidies 35 Egypt s budget sector* expenditure (in % of GDP) 3 25 2 15 1 5 215/216 216-217 217/218 218/219 219/22 22/221 221/222 222/223 Total Expenditure Energy Subsidies Fuel Subsidies *Budget sector comprises central government, local governments, and public corporations Fuel subsidies: gasoline, diesel, kerosene, LPG and fuel oil; Source: IMF Country Report No. 18/213 8
Gas output could nearly double following key ENI and BP projects, LNG imports will stop, providing economic relief 9 8 7 6 5 4 3 2 1 Egypt s gas supplies (excluding pipeline imports), 214-221e (bcm) 214 215 216 217 218 219 22 221 Atoll, Nooros and near term developments LNG FSRU Zohr WND - North Alexandria WND - Phase 2 Salamat ENI s possible Noor discovery, if confirmed, would be another game changer for Egypt and the region Source: Ifri, BP, ENI, Gafney Cline& Associates 9
Egypt working to add coal, nuclear & renewables capacities, gas demand for power & industry continues to grow Electricity Mix «Updated Optimal Scenario» 229/23 (%) 9 Gas demand/supply balance, 27-222 E (bcm) 8 26 11 9 7 6 5 1 16 4 3 24 4 2 1 CSP PV Wind Hydro Gas&Oil Nuclear Coal 27 28 29 21 211 212 213 214 215 216 217 218 219 22 221 222 Source: Ministry of Electricity and Renewable Energy Gas consumption Gas production Source: BP218, Ifri estimates Inefficient thermal plants could be phased out and the 14,4 GW Siemens turbines are super efficient, however gas demand will still grow as gas fired plants will offer a back up to meet peak demand, will offset oil plants and will provide a reserve to compensate for potential delays in the development of other projects. This will constain the gas export potential. 1
Israel another gas winner: electricity mix cleaner&more secure, surpluses exported to Jordan and Egypt Israel s electricity mix in 21 and 216 Source: Ifri Israel will phase out coal by 23 and gas will meet growing domestic demand for power and in the transport sector. A second export wave > 225 is possible if Leviathan phase 2 is developed 11
Egypt will become a gas hub in the Eastern Mediterranean as infrastructure is already in place East Mediterranean gas infrastructure and projects Offshore gas projects are not cheap, Egypt is a growing&attractive market, sunk cost infrastructure or small new investments likely to be privilegged for selling gas. LNG exports from Egypt based on Israeli or Egyptian gas to Europe likely though in the short term. 12 Source: Ifri
Cyprus gas potential promising, exploration ongoing (Calypso ), synergies with Israeli/Egyptian infrastructure Source: Ihutterstock 13
Centre Énergie Centre for Energy eylmazzega@ifri.org 27, rue de la Procession, 7574 PARIS CEDEX 15 Tél. +33 () 1 4 61 6 Fax : +33 () 1 4 61 6 6 www.ifri.org 14