The discovery of a large gas field in off Egypts Mediterranean coast could transform Cairos energy outlook over the medium term.
Egypt had been a net gas exporter since 2000 and has the capacity to sell gas both via pipeline to neighbouring countries and through liquefied natural gas (LNG) shipments, but recently the country has had to rely on imports to meet domestic demand.
However, Egyptian gas production peaked in 2009 at 6.1 billion cubic feet a day (cf/d) and dropped to 4.7 billion cf/d in 2014, according to the latest figures from BP.
During the same period, consumption has risen from 2.6 billion cf/d to 3.6 billion cf/d, squeezing Egypts surplus gas production by 58 per cent in just five years.
But the supergiant gas discovery at Italian oil group Enis Zohr prospect could turn around the countrys fortunes, and significantly boost Egypts gas production in the next decade.
Eni describes the deep-water Zohr find as the largest gas discovery ever made in Egypt and in the Mediterranean Sea. The company said it will immediately appraise the asset with the aim of accelerating a fast-track development.
The oil group estimates that the discovery could hold 30 trillion cf of lean gas, meaning the asset has the potential to increase Egypts existing proved reserves of 65.2 trillion cf by almost 50 per cent.
To put the potential size of the discovery into perspective, the estimate is nearly a tenth of Saudi Arabias total proved gas reserves and larger than Omans entire proved reserves.
Egypt has other gas prospects. BP signed a deal earlier in 2015 to restart the $12bn North Alexandria field development project in Egypts Nile Delta. The field is expected to produce 1 billion cf a day of gas when fully operational, expected in 2017.
Both developments with Zohr a longer-term prospect could be a transformative for Egypts non-oil industrial sector, which has suffered in recent years from shortages of natural gas.
Cairo would have to prioritise the power sector with any additional gas capacity, but the scale of the planned developments should leave supplies for allocations for a variety of early-stage petrochemicals and metals projects in the planning stages.
The additional supply would also give Cairo the option of restarting LNG exports. Spanish Egyptian Gas Company (Segas) operated by Eni shut its LNG export operations in 2013 due to a lack of gas as its feedstock was diverted to maintain supply to Cairo.
The complex has the capacity to export 3.2 million tonnes a year (t/y) of LNG which, before the shutdown, was sold into Spain.
Egypt LNG, which is operated by the UKs BG, shut down much of its 7.2 million t/y LNG operations in 2014.
Egypt is focused on developing new industries to create jobs following the political upheaval of 2011-2013 but the availability of gas has put a damper on the countrys potential develop new projects. A significant supply of gas coming on stream will give the government a major boost in achieving its goals.