Eni and EGAS acquire the Damietta liquefaction plant in preparation for resolving arbitration disputes

Yesterday, the Italian company Eni signed a series of agreements with the Egyptian General Petroleum Corporation, the Egyptian Natural Gas Holding Company, and the Spanish company Naturgy, paving the way to restart the Damietta plant to liquefy Gas in Egypt by the first quarter of 2021.

The agreements will allow for the amicable settlement of the pending disputes between Union Fenosa Gas and Segas with EGAS and the government and the subsequent restructuring of Union Fenosa Gas itself, according to Al Borsa.

The Damietta liquefaction plant is owned by Segas, which is 80% owned by Union Fenosa, which in turn is owned equally between Eni and Naturgy. The plant has a capacity of 7.56 billion cubic meters annually, but it has been idle since November 2012.

And Eni said in a statement that Union Fenosa owns 80% of the Egyptian Spanish Gas Company Segas, and that under the agreement it will acquire 50% of it and the Egyptian Natural Gas Company EGAS 30 %.

After the deal, the ownership structure of the Egyptian Spanish Gas Company Segas will be divided into 50% for the Italian company Eni, 40% for the Egyptian Natural Gas Company EGAS, and 10% for the General Petroleum Corporation.

Eni will purchase natural gas for the plant and receive the corresponding liquefaction rights, which will increase the volume of LNG in its portfolio by 3.78 billion cubic meters annually, and it will also take over commercial activities of Union Fenosa related to natural gas in Spain, which strengthens its presence in the European gas market.

In 2018, Union Fenosa obtained an international arbitration award to compensate $ 2.013 billion for the period that the Damietta liquefaction plant stopped operating.

Eni added that yesterday's agreements, which are in line with the agreements concluded last February and take into account the development of the energy scenario, allow for the promotion of its strategic objectives in terms of growth Its LNG portfolio, especially in Egypt, where it mainly produces gas, is of the utmost importance to all parties concerned to resolve all outstanding disputes.

and she said that the operation, subject to the authorization of European authorities and subject to fulfilling certain precedent conditions, allows for the strengthening of Eni's presence in the eastern Mediterranean, which is a major area for the supply of natural gas, which is Important resource for energy transmission.