Egyptian piped gas targets European market

The 1,200 kilometres long AGP is being extended by Russia's Stroytransgas across Syria. The line currently runs from El-Arish in north Sinai to the Jordan-Syria frontier.

This pipeline has already been stretched to Amman and Rahab in north Jordan. The new segment to Homs in Syria is due for completion this summer from where it is later due to be extended to Tripoli in Lebanon.

Developers plan to link the Syrian spur to Turkey supplying up to 10 billion cubic metres-a-year of Egyptian natural gas to Turkey and Western Europe perhaps as early as 2010.

The AGP is likely to become a strategic element in European gas supplies with the possibility of linking with the planned Nabucco gas grid in Austria. This is planned to distribute gas piped through the Balkans from Middle East fields including those in Iran and Iraq.

In addition, AGP partners are also planning to expand their gas development plans to include the promising Akas gas field in western Iraq near the border with Syria. The latter field is estimated to contain more than 2 trillion cubic feet of gas. The addition of Iraqi gas would make the AGP even more significant for European energy needs.

The AGP's main supply source for now comprises Egyptian fields which are estimated to contain some 67 trillion cubic feet of proven natural gas reserves though observers believe the actual amount could be double this figure.

Processed liquefied natural gas is already playing an increasingly valuable role in the country's hydrocarbons exports to a customer base in France, Italy, Spain and the US.

However piped gas is also a growing export. Regional customers include Israel which has agreed to buy 1.7 billion cubic metres a year, over 15 years, from 2008 in a supply contract valued at $1.5 billion.

Current investment and exploration offshore in the Mediterranean, Nile Delta as well as northern Sinai is expected to raise Egypt's overall gas exports to more than 35 billion cubic feet a year by the end of the decade.

Egyptian and other gas supplies piped from the Middle East also seem destined to play a strategic role in Europe's energy supplies lessening a vulnerable dependence on Russian energy supplies.

AGP supplies to Europe will augment those from Algeria presently routed through Tunisia and underwater to the Italian mainland via the Transmed pipeline.

The Galsi pipeline also takes Algerian gas to Sardinia and then on to Tuscany while the Medgaz pipeline is due to become operational next year taking Algerian gas to Spain

Once Turkey is linked to the AGP there is not only the prospect of Europe being supplied with piped gas from Iran but also from the Gulf when the Dolphin project to distribute Qatar natural gas to the UAE is fully implemented.