Massive gas find a boon for Egypt, salve for energy crisis
The discovery of a huge natural gas field off the Egyptian coast is a major boon for the country that will help alleviate energy shortages and boost the economy, experts said yesterday.
The new "supergiant" offshore field revealed a day earlier by Italy's Eni SpA and billed as the "largest-ever" found in the Mediterranean Sea could alleviate the Arab world's most populous nation's need for gas imports, they said.
The latest discovery represents about half of Egypt's current gas needs and will cut its trade deficit and help bring in tax revenue when it comes online in some five years, said Angus Blair of investment advisory firm Signet.
"It's a very useful positive economic factor in Egypt," he said. "Obviously, it will help President (Abdel-Fattah) el-Sissi and the government, but to look at it very practically, and economically, it has just come at a very good time."
Egypt is making a gradual economic recovery from the years of chaos since a 2011 uprising toppled longtime autocrat Hosni Mubarak. Rolling power cuts have been a regular feature of life as the country has been ruled by the military, an Islamist president, and then a military-backed government.
This summer, however, Cairo has been largely spared the power cuts. El-Sissi has staked his legitimacy on fixing the economy and has made energy projects a priority. Last March, authorities signed a $4.6 billion contract with Germany's Siemens AG to build a new 4.4-gigawatt power plant in southern Egypt and generate 2 gigawatts of wind power.
Combined with other agreements signed with Siemens, and the US firm General Electric, Cairo hopes that it could boost its electricity generation capacity by a third.
Given the country's surging population of 90 million, growing at over two per cent per year, Egypt desperately needs new energy sources.