Production has started from the DEKA (Denise and Karawang) offshore gas project in Egypt in a move that is likely to be welcomed by the nation, as it struggles to find a solution to its worst energy crisis in decades.

Gas is being produced at a rate of 1.8 million cubic metres a day from the new subsea well Denise South Six according to a statement released by Eni. Eni holds a stake in the project through its affiliate IEOC Production, which is in a joint venture with BP Egypt.

As the project continues a total of five subsea wells are going to be drilled. Subsea production systems are going to be installed along with sealines and gas processing facilities at the El-Gamil Gas Plant onshore.

The project’s peak production is expected in the first quarter of 2015 with a total gross gas rate of around 6.5 million cubic metres per day.

The Denise South 6 well is the first development well of the project, which is located in the Temsah Concession Area in the offshore Nile Delta, Egypt. The well is located approximately 65km north of Port Said and stands in 100 metres of water.

IEOC holds a 50 per cent working interest in the Temsah Concession and operates through its joint venture Petrobel. The remaining 50 per cent stake interest in Petrobel is held by the state operator Egypt General Petroleum Corporation (EGPC).

Domestic gas production is currently declining in Egypt while domestic demand for gas increases as the country’s population expands.

A shortage of natural gas has led to feed stocks being diverted away from liquefied natural gas (LNG) facilities to meet domestic demand, something that has done significant damage to energy company profits – and made them increasingly reluctant to increase investment in the country.

The government is currently seeking gas imports to meet domestic demand, but it is uncertain how the imports will be funded.

On Sunday 3 August Egypt’s Oil Minister Sherif Ismail told Reuters that the country owed $5.9bn to international oil companies as of the end of June.