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Italian energy giant ENI and Egypt have announced a significant natural gas discovery in the Eastern Mediterranean, offering Cairo and the wider European continent a potential lifeline as the Iran war sends energy import costs soaring.
Preliminary estimates point to around 2 trillion cubic feet of gas in the Temsah field off Egypt’s Mediterranean coast, ENI said in a statement on Tuesday.
The discovery also includes 130 million barrels of petroleum condensates, according to Egypt’s petroleum ministry, which it said forms part of a broader push to boost domestic production and cut the country’s import bill.
The Denise W well is now being prepared for testing. Once complete, more wells will be drilled and an offshore production platform built before the field can be brought online.
Denise W 1 is an exploratory well drilled within the Temsah Concession, sitting 70 kilometres offshore in 95 metres of water depth and less than 10 kilometres from existing infrastructure.
ENI operates it with a 50% working interest alongside BP, which holds the remaining 50%, through their joint venture Petrobel.
Iran war’s toll on Egyptian energy bills
The timing could hardly be more pressing. Egypt’s natural gas supplies from Qatar and Israel have been severely disrupted since the Iran war escalated, forcing Cairo to introduce a raft of energy-saving measures — among them a business curfew, higher fuel prices and slower government spending.
Prime Minister Mostafa Madbouly said last month the conflict had nearly tripled Egypt’s natural gas import bill, from $560 million (€515mn) to $1.65 billion (€1.52bn,) per month.
The discovery revives memories of Egypt’s last major offshore breakthrough.
In 2015 the Zohr field, the largest on the Mediterranean and holding an estimated 30 trillion cubic feet, raised hopes that Egypt could become energy self-sufficient and a major exporter.
Those ambitions have since been scaled back. Egypt has pivoted towards positioning itself as a regional processing and transit hub, using its liquefaction terminals to route gas from neighbouring countries, including Cyprus.
Last month brought another discovery, this time onshore — Egypt and Apache Corporation announced a find in the Western Desert expected to yield 26 million cubic feet per day.
Whether the Temsah find proves large enough to meaningfully ease Egypt’s energy crunch will depend on how quickly it can be brought into production and how long the war drags on.