chatelus_1998The French expert in energy Michel Chatelus said that liquefied natural gas (LNG) is a prosperous future for Egypt through the reserves estimated between 1200 and 3000 billion cubic meters.

Chatelus, professor of economics at the Institut of Politicql studies in Grenoble, said that the oil reserves in Egypt amounted to 400 million tonnes (one tonne of oil = 7,3 barrels), which represent less than 1% of world reserves, while production reaches 750 thousand barrels/day.

The french expert believes that Egypt will stop its oil exports between 2005 and 2010 if the current rate of consumption continues. "Worldwide oil companies are becoming less interested in talking about oil in Egypt, but more gas", he says.

According to Chatelus since the discovery of significant gas resources in Egypt, two issues are taken into account. "Firstly, the development of gas consumption in the country, especially in houses. For now, gas is still representing only 30% of energy consumption against 60% for oil ... the problem comes mainly from the lack of networks", he says. "The second issue is the export of natural gas in order to generate income that can offset the declining revenues from oil".

Chatelus says that Egypt can export during the next 5 years, 10 billion m3 of natural gas. "However, Egypt will face fierce competition in the market for natural gas. This competition is due to the presence of the largest world reserves of natural gas in Qatar (15 thousand billion m3), while Algeria has reserves estimated about of 4200 billion m3. At the same time, Libya is preparing to build a pipeline to export natural gas to Italy, "he added.

Chatelus believes that Egypt can cope with this competition by focusing on projects for liquefying natural gas. "The LNG would be sold in all markets without needing pipeline, whose cost is high and the markets are limited", he explained.

According to him, the French companies are interested in Egyptian natural gas, specially LNG. "Gaz de France (GDF) has bought the entire production of LNG in Alexandria for the 20 years to come", he says. "Similarly, Electricité de France (EDF) is participating to the project of electrical connection in the Mediterranean, while GDF will build two large power plants from natural gas, in the Gulf of Suez and Port Said, where capacity is of 600 megawatts each.

Chatelus said that the natural gas market is volatile and that the courses are greatly vary. "However, like the Organization of Petroleum Exporting Countries (OPEC), Russia has created some sort of orgqnizqtion for the exporting natural gas contries, to which Egypt has recently joined in order to control the price", he concluded.