SEGAS LNG complex

Located in Damietta, on the Mediterranean coast 60 kilometers west of Port Said, the Spanish Egyptian Gas Company (SEGAS) liquefied natural gas (LNG) complex came on stream in late 2004 to export LNG to the Spanish market via a receiving terminal at Sagunto in Spain.

As of mid 2013 though, the LNG plant had stopped operating due to a lack of gas supply as the government began to channel natural gas to the domestic market, after nation-wide fuel shortages and power cuts in the summer of 2012, rather than sending it to the plant for liquefaction and export. According to Reuters analysts do not expect the plant to resume its operations in 2013.

Ownwership
The plant is owned by SEGAS, in which Union Fenosa Gas (UFG) holds an 80 percent share and the state-owned Egyptian General Petroleum Corporation (EGPC) and Egyptian Natural Gas Holding Company (EGAS) hold 10 percent each. In 2003 Italy's Eni acquired 50 percent of UFG; the other 50 percent is held by Spanish utility Gas Natural Fenosa.

Production Capacity
The SEGAS complex was the first facility of its type in Egypt and is one of the world's largest capacity single train facilities. The facility's output capacity is five million tons of LNG per year: 3.2 million goes to the UFG, while EGAS sells the rest.

The Damietta plant is fueled by the Egyptian national network with gas mainly provided from offshore Mediterranean reservoirs in which the IEOC, Eni's Egyptian subsidiary, is a partner, and from other reservoirs run by BG Group and Petronas.

EGAS Lawsuit
In April 2013, the plant filed a complaint to the International Chamber of Commerce alleging that EGAS had failed to comply with contracts. While the government cut the plant's supply of gas, EGAS has also delayed payments for its 40 percent share of the company's production, according to Reuters. Under the contract, the partners are still obliged to pay for contracted LNG capacity, even if there is no production at the plant. If the situation prolongs, Reuters reported, UFG could seek international arbitration against Egypt, a more serious concern than the complaint filed to the ICC.

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