Eni Announces Mega Gas Discovery in Egypt

Eni Announces Mega Gas Discovery in EgyptEni Announces Mega Gas Discovery in Egypt

Italian energy group Eni announced it had discovered the largest known gas field in the Mediterranean off the Egyptian coast, predicting the find could help meet Egypt's gas needs for decades to come.

The Italian major said in a statement on Sunday the offshore Zohr field could hold 30 trillion cubic feet of gas, covering an area of about 100 square kilometers, Reuters reported.

"Zohr is the largest gas discovery ever made in Egypt and in the Mediterranean Sea, and could become one of the world's largest natural gas finds," it said, adding that it had full concession rights to the area.

The find follows other significant gas discoveries in the Mediterranean in recent years. This is expected to have a major impact on the region's economy and potentially offer Europe new supply options, allowing it to lessen its dependence on Russian gas imports.

It also represents a major boost for Egypt, where power cuts caused by gas and oil shortages have often fueled unrest.

Eni, 30% controlled by the Italian state, said the discovery was located at a depth of 1,450 meters, adding that it planned to fast track development of the site, using existing infrastructure. It said yet more gas might be uncovered in future drilling.

It is the biggest foreign oil and gas producer in Africa, where it has significant operations in war-racked Libya. In 2011, it made huge finds in offshore Mozambique, with an estimated 85 trillion cubic feet of gas in place.

It has operated for more than 60 years in Egypt and is one of the main energy producers in the country, with a daily output of 200,000 barrels of oil equivalent.

In June, it signed an energy exploration deal with Egypt worth $2 billion, allowing Eni to explore in Sinai, the Gulf of Suez, the Mediterranean and areas in the Nile Delta.

In July, Egypt raised the prices it pays Eni for the natural gas it produces.

"This historic discovery will be able to transform the energy scenario of Egypt," said Eni CEO Claudio Descalzi who met Egyptian President Abdel Fattah al-Sisi on Saturday to discuss the find.

Egypt, which once exported gas, has become a net energy importer over the last few years.

Under Sisi, Egypt's state-owned gas company EGAS has increasingly rationed gas supplies to much of the domestic industry, which has at times crippled production and hampered the economic recovery.

The government has also attempted to improve the energy situation by slashing state energy subsidies, paying down its debt to foreign energy firms and negotiating import agreements.