Egypt’s energy development strategies

Egypt

Hisham El Grawany, vice-president, Egypt market manager, Middle East and Africa (MEA), energy systems for DNV, talks to The Energy Year about Egypt’s energy development strategies and the part the company wants to play in building up the nation’s energy infrastructure. DNV provides verification, risk management and technical advisory services to Egypt’s oil and gas industry.

How has activity in Egypt’s energy industry been affected by the Covid-19 pandemic?
In Egypt we have a lot of activity from IOCs. Most of them decided not to go too far with their investment plans because of the low oil price. Also, the demand for energy has been low as there has been less transportation in use. There will be some fear in the market about investing until there is more certainty. Egypt was also negatively impacted because we don’t have supply chain manufacturers in the country.
Oil and gas developments were slow in 2020 but recovered in the beginning of 2021. A lot of projects came back. The bid rounds completed in 2019 – especially in the Red Sea – did not see any direct activity in 2020 but began to have direct activity in 2021 with geophysics and similar works.
Egypt has enough electricity; there is no need for extra work on power station projects. The only current projects are related to investing in the extra supply we have. We have around 25% electricity oversupply. This has allowed us to be in a relaxed position during the pandemic.

What are your thoughts on the Eastern Mediterranean as an energy hub?
Egypt has tried to play a bigger role in the energy sector outside of the oil and gas sector. There is co-operation between the oil and gas and power generation sectors to ensure we achieve our objective of being an energy hub in the region. We must look at the Eastern Mediterranean energy hub in both the energy and the geopolitical context. We have good communications with our neighbours, such as Greece, Cyprus, Israel and Lebanon. We are moving towards good relations with Turkey. The East Mediterranean Gas Forum is hosted in Cairo, and we want to make sure all area participants are treated fairly.
We have one of the largest petrochemical plants in the Middle East under construction run by Red Sea National Refining and Petrochemicals Company. Their facility will have state-of-the-art technology in terms of process safety management and the internet of things.

What recent projects has DNV worked on in the region?
We have been interested in going into deepwater operations to look for gas for a long time. DNV has had success with the Shell (BG Heritage) joint venture, and later with Eni on the Zohr field. We were part of the Zohr mega-project’s assessment operations as the marine warranty surveyor. We were also the independent verification body in the West Delta Deep Marine [WDDM] projects. We have a master service agreement with Burullus Gas Company, which is a joint venture between Shell and EGPC.
We have been involved with Burullus on the WDDM concession in the Mediterranean deepwater for 19 years. We have been the independent verification body for Burullus in nine deepwater mega-projects and three onshore mega-projects. Our last one was in WDDM phase 9B, and we will be engaged in the preparatory work for the upcoming phase.
There is also downstream activity. We were proud to be part of the success story of ERC [Egyptian Refining Company]. We started as independent quality control and quality assurance body. During the execution, ERC assigned DNV to take part of the project management role through construction monitoring activities. Now we are moving from capex to opex activities and starting a new contract for asset integrity management.

What are you doing to help with Egypt’s modernisation programme?
Minister of Petroleum and Mineral Resources Tarek El Molla and the Ministry of Petroleum launched an ambitious plan for modernisation and capacity building for the oil and gas sector and chose DNV as part of this modernisation programme in the process safety management part. We collaborated with national authorities engaged in oil and gas activities, represented by EGPC. We worked on digitalising the HSE management process. The strategy involves getting the most out of investments by digitalising the entire process value chain.
We are working with EGPC to make safety processes digital through the DNV software Synergi Life.

How has merging DNV’s oil and gas and energy divisions into an energy systems division contributed to your current strategy?
Before the recent announcement, our energy team was already engaged in different renewables activities in Egypt in wind and solar. This merger is an inclusion of the energy system supply chain, as we are looking at the entire energy supply chain. A key element of our strategy is DNV’s energy transition outlook. We are looking at how to lead such an approach globally and at the country level.
Our clients are beginning to talk about decarbonisation in Egypt. We did a webinar with EGAS about the development of hydrogen. We are seeing a transition from fuel-powered vehicles to gas-powered vehicles. There are also electric cars entering the market. It is advancing fast, and it reflects Egypt’s energy transition vision.
Digitalisation is one of our key pillars. We are also participating in many risk studies and consulting services for mega-projects. Verification for downstream projects will also play a large part in our operations. We are trying to approach the concerned parties regarding the new trend of smart cities and energy conservation.

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