Union Fenosa Gas Challenges Reports on Damietta Arbitration Case

Union Fenosa Gas Challenges Reports on Damietta Arbitration Case

Union Fenosa Gas (UFG), owned 50-50 by Spain’s Gas Natural Fenosa and Italy’s Eni, has challenged reports that Egypt’s state gas company EGAS has been exempted from paying the demanded $270m to owners of the Damietta liquefaction plant in relation to a case filed with the International Court of Arbitration in Paris, Natural Gas Europe informed.

The Damietta plant is owned by Segas, itself 80%-owned by UFG with 20% held by Egypt’s state-owned EGAS and EGPC. UFG raised complaints that the Damietta plant has been idle since 2012, because gas intended for liquefaction and export was instead diverted to the Egyptian domestic market.

UFG insists that the arbitration has not been concluded. “This is just a partial award; what is relevant is that the tribunal has clearly stated that it has jurisdiction to decide on the merits of the case and that means that the arbitrators will continue with the process,” a UFG source told Natural Gas Europe.

Daily News Egypt wrote that production was stalled at two LNG facilities in 2013, when the government under President Abdel Fattah Al-Sisi decided to divert gas to the domestic market in order to mitigate power cuts and black outs, which were the primary cause of frustration with the public, as well as private companies.

Egypt’s designation as a net natural gas importer is a recent one and corresponds to Israel and Cyprus’ interests in capturing the Egyptian market’s increasing demand for natural gas. Egypt must import $1.1b worth of gas to satisfy the country’s $5b need for natural gas.


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