Eni Finds Gigantic Gas Field off Egypt’s Coast

Italian energy giant Eni has discovered what it is calling a “super giant” gas field off the coast of Egypt. Once fully developed, what is believed to be the largest-ever gas find in the Mediterranean Sea could play a “major” role in meeting Egypt’s natural gas demand for decades, CEO Claudio Descalzi said.

Using existing infrastructure, Eni will begin drilling more wells and installing pipelines next year and could see the first fruits of the project in about 2018, the CEO told the Italian daily newspaper La Repubblica.

The Italian group said it intends to make a final investment decision this year, with drilling likely to begin next year, and first gas production beginning shortly afterwards. Eni estimates peak output at roughly 65-80 million cbm per day.

Energy market analysts said the field, thought to be equivalent to 45% of Egypt’s reserves, could also give Europe a new supply option, reducing its dependence on Russian gas imports. Depending on how much of the gas stays in the country, Egypt may not have to import any more gas for at least 10 years, Descalzi speculated.

Large oil and gas finds of this magnitude have become rare in recent years as companies have had to spend bigger sums on new technology to explore in hard to access deep water areas and other higher cost regions. Many of the market’s major companies have been scaling back operations.

At Eni, however, “the exploration confirms the focus of our growth strategy,” said Descalzi. In the past seven years, he said the Italian energy group has discovered 10 billion barrels of resources, including 300 million in the last six months, thus confirming its position at the top of the industry.