Industry Trend Analysis - Progress On Transformative Zohr Phase II - NOV 2017

BMI View: The award of a major subsea contract suggests the next phase development for the Zohr project is progressing. The second phase of the giant offshore field will be transformative for Egypt, significantly boosting domestic production and reducing the gas imp ort burden.

Petrobel, a joint venture between Eni and EGPC has awarded a major subsea contract to Baker Hughes, a GE Company, for the second phase of development of the supergiant Zohr gas field offshore Egypt. The contract covers project management, engineering procurement, fabrication and construction of the subsea production system.

Whilst first gas from Phase 1 of the project is expected in December 2017 - a little over two years since the initial discovery - clarity on the development and decisions regarding the second phase of the project has as of yet been relatively opaque. However, the signing of engineering contracts for subsequent development suggest momentum behind the second phase of growth is building. Given the size of the field, in order to benefit from the full production potential, additional phases of growth will need to be developed for the field. Full field development could potentially produce in excess of 25bcm a year.

Huge Upside From Zohr
Egypt Natural Gas Production, bcm
*Phase 2 estimated. f = BMI forecast. Source: EIA, National Sources, BMI.

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