Egypt’s state-owned Egyptian Natural Gas Holding Co. (EGAS) has shelved plans for the construction of a second LNG train at Damietta until enough natural gas reserves are found, according to a company official.

 

“If the Egyptian government is given proven gas reserve certificates then it will deal with the project in a more positive manner because we have a lot of commitments with domestic demand,” said Hassan Sabry, an EGAS projects and planning official.

 

The current single-train liquefaction facility at Damietta, which has a capacity of 8 billion cu m/year, was built by Spanish utility Union Fenosa and shipped its first cargo in 2005.  In June 2006, UF, along with partners BP PLC and Eni SPA, signed a framework agreement to build a second 6.5 billion cu m/year train to expand capacity to 14.5 billion cu m/year.

 

The second train was due online by yearend, but was then postponed to 2010.  Earlier this year the Egyptian oil ministry, despite strong domestic political opposition to any increase in gas exports authorized Eni and BP to build the second train in Damietta.

 

But Shamil Hamdy, Undersecretary at the Ministry of Petroleum, later said that Eni had delayed the project because it lacked the necessary financing due to the global economic downturn.