Eni has boosted its liquefied natural gas portfolio after the Italian major signed deals with Egypt’s government and other parties that pave the way for the Damietta LNG plant on Egypt’s Mediterranean Sea coast to resume operations after years of being left idle.

The oil and gas giant signed the agreements with the Cairo administration as well as state duo Egyptian General Petroleum Corporation (EGPC) and Egyptian Natural Gas (EGAS) as well as with Spanish company Naturgy.

Eni said the agreements pave the way for a resumption of operations at the Damietta facility — which is owned by SEGAS — in the first quarter next year. The plant has a capacity of 7.56 billion cubic metres per annum of gas.

The agreements also include the “amicable settlement” of the pending disputes of Union Fenosa Gas and SEGAS with EGAS and Cairo.

Eni holds a 50% stake in Union Fenosa, with Naturgy on the other 50%. Union Fenosa holds an 80% stake in SEGAS.

Union Fenosa will also undergo a corporate restructure as a result of the agreements, with the assets to be transferred to Eni and Naturgy.

At Damietta, Eni will move to a 50% share in SEGAS, with EGAS on 40% and EGPC on 10%. In addition, Eni will also take over the contract for purchase of gas from the plant and will receive the corresponding liquefaction rights.

This means its LNG portfolio volumes will increase by 3.78 Bcm per year, which Eni said would be available on a free on board basis “with no destination restrictions”.

Eni will also take over control of Union Fenosa’s assets in Spain.

The Damietta plant has been idle since 2012, when gas shortages forced the Egyptian government to halt supplies, prompting Union Fenosa to take legal action with a $2 billion claim against Egypt.

Eni said in February it had signed agreements with the other Damietta stakeholders to restart the facilities by June 2020.

LNG

Damietta deals: Eni swells gas portfolio as agreements reached at long-dormant Egypt plant