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The construction site of Beni Suef combined cycle power plant. The new power plant will achieve a fuel efficiency of natural gas of more than 60 percent.

Egypt Megaproject

The case for natural gas

Having overcome a shortage of natural gas, Egypt is making the most of its reinvigorated natural gas production with new high-efficiency combined cycle power plants. By using powerful gas and steam turbines from Siemens, the fuel efficiency of natural gas will reach approximately 60 percent.

Natural gas was first introduced to the Egyptian market in 1975. Since then, a remarkable progress has been achieved. The gas production in 2010 was 167 million cubic meters per day while the consumption peaked at 125 million cubic meters per day. According to the BP Statistical Review, by the end of 2014 the gas reserves were at 1850 billion cubic meters.

Due to the challenges arising from the economic and political situation after 2011, however, Egypt encountered a crisis of gas production. This was not due to a lack of fuel resources, but rather triggered by a delay in carrying out some major projects for the development of the discovered fields, as well as by not signing new exploration agreements for up for three years during the period from 2010 until 2013.
The electricity sector in Egypt is the biggest consumer of natural gas, accounting for 57 percent of the local gas production, while the industry sector consumes 28 percent, the petroleum sector 11 percent, the residential sector just 3 percent and the compressed natural gas sector (CNG) only 1 percent.

Running out of fuel

The crisis had reached its peak in the summer of 2014 and caused regular blackouts all over the country, in residential as well as industrial areas, because the power plants did not have enough fuel to run on. The report of Egyptian Electric Utility & Consumer Protection Regulatory Agency (Egypt Era) from August 2014 noted 31 days on which the loads exceed the production capabilities. According to the BP Statistical Review, the consumption of gas dropped by 6.6 percent in 2014 compared to 2013 while the production dropped by a staggering 13.1 percent for the same period.
In the same month, the ministry of petroleum reduced the amount of natural gas allocated to heavy industries that intensively rely on gas, such as fertilizers and cement plants, to shift greater quantities of gas to power plants. However, power generation kept suffering from a fuel shortage: 118 million cubic meters were being pumped to gas-fired power plants every day, but their actual requirement was estimated at around 125 million cubic meters.

How the gas crisis was managed

To counter the country’s energy crisis, Egypt had to take further steps.

- The first step was to successively boost the production during the next years on new fields: First and foremost, at the Zohr field, newly discovered by the Italian gas company Eni at Shorouk concession area in the Egyptian exclusive economic zone, worth US$12 billion, which could hold a potential of 85 billion cubic meters of gas, making it the largest gas discovery ever made in Egypt and in the Mediterranean.

- As an interim measure, LNG imports have been initiated through two rented floating storage and regasification units (FSRUs) in Ain Sukhna port with capacity of at least 14 million cubic meters per day each. Plans are underway to rent a third that will start working late 2017. Egypt has allowed heavy industry factories to meet some of their gas needs through the FSRUs by paying half at government contract rate and the other half at global market rate.

At Beni Suef, the first SGT5-8000H gas turbine to be installed in the Middle East is lowered onto its foundation.

- A further step was the liberation of the gas market in Egypt, allowing natural gas importers to supply their gas directly to the consumers through a third-party grid.
- Another aspect to managing the crisis consisted in introducing coal to the Egyptian energy mix, allowing the industrial sector to use coal for energy generation.

Higher fuel efficiency for natural gas

Around 15 to 16 GW of the installed capacity in Egypt is currently generated from old steam power plants using natural gas and mazut (heavy duty fuel oil) with low fuel efficiency. By generating electricity in combined cycle operation, the fuel efficiency of natural gas would improve by 50 percent: The same amount of natural gas could generate 1.5 kilowatt per hour in a combined cycle plant instead of 1 kilowatt per hour in a solely steam-powered one.

Professor El-Salmawy argues for a higher fuel efficiency of natural gas.

“Using natural gas as an energy source really calls for combined cycle technology. It seems such a waste to use gas on steam plants with an efficiency of 42–44 percent, whereas the same amount of gas could produce 1.5 times the amount when used in a combined cycle plant,” argues Dr. Hafez A. El-Salmawy, Professor of Energy Engineering at Zagazig University in an interview with Siemens Magazine. “Around 45 percent of the current installed capacity comes from steam plants. That percentage will decrease when the three new combined cycle plants from Siemens in Beni Suef, Burullus and New Capital start working.”

He adds: “That’s why these plants are considered a real qualitative change in the structure of Egypt’s energy generation. Relying on those high-efficiency plants will have an environmental impact.”

The natural gas supply gap has been closed, says Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources.

Eng. Tareq El Molla, the Egyptian minister of petroleum and mineral resources, commented on the current situation of gas in an e-mail exchange with Siemens Magazine: “Now, we’re providing natural gas to all sectors of the domestic market, especially electricity and industry. There is no gap in supplies since last November. Both implemented projects for gas development and production as well as LNG imports contributed to securing supplies necessary to the domestic market. It is planned that the Zohr discovery will contribute positively to achieve the natural gas self sufficiency that Egypt is targeting by 2022, when Zohr discovery and other new gas development projects start production consequently during the few coming years.”

Manu Abdo, journalist based in Cairo.
Picture credits: Roger Anis