Egypt’s billion dollar waste gas opportunity

Egypt has an opportunity to increase export revenues by $600 million p.a. and further decarbonise the sector by up to 90 million tonnes p.a. by tackling flaring venting and leaking

At the Egypt Petroleum Show, we outline new approaches that utilise the best technology, deploy innovative business models and bring new sources of third-party investment.

The recent exploration successes in Egypt are helping to deliver continued production growth towards an expected record of c. 8 bcf per day.  This “gas renaissance” strengthens not only Egypt’s self-sufficiency but also its position as a leading exporter of LNG and pipeline gas.  Since gas is widely seen as a cleaner bridging fuel, Egypt plays a key role in the “energy transition”.

Overview of flares in Egypt, extracted from Capterio’s Global Flare Intelligence Tool (GFIT) Size of bubble represents size of flare.

However, natural gas is not as “clean” as many players suggest when the complete supply-chain (also including oil production) is evaluated.  Globally, some 278 billion cubic metres ($43 billion dollars annually) of gas is flared, vented or leaked.  When this “wasted” gas is included, the GHG advantage of gas over coal is questionable. Leading gas producers are now acknowledging publicly that “gas may not even be a transition fuel, let alone a destination fuel unless the problem of methane is solved”.  

Gas flaring is also a significant economic and environmental opportunity for Egypt.  Over 120 individual flares burn some ~240 million scf/day of gas.  This represents not only a potential incremental revenue opportunity for Egypt of at least $400 million per year, but also an opportunity to reduce the CO2-equivalent emissions of up to 90 million tonnes per year (depending on the degree of methane slip), significantly contributing to the Paris climate agreement.

Figure 2: The size of the global prize from tackling flaring (burning of waste gas, often incompletely), venting (deliberate release of methane) and leaking (accidental release of methane).

EGPC and partners recognise the opportunity for economic and environmental development and are already progressing the “zero routine flaring” agenda.  Such leadership creates opportunities to monetise flared natural gas (plus yield additional condensate and NGLs), demonstrate leadership on the global stage and provide premium-quality low CO2 gas into key markets. 

To deliver this opportunity, our industry must address the “barriers” that currently hinder flare monetisation.  Material reductions in flare gas will require the use of best-in-class proven technologies (delivering gas, power, liquids, chemicals or other products), new business models (including third-party outsourced solutions) and new investment approaches (including equity participation).

To solve this situation, Capterio has two core offerings:

  • Firstly, we provide analytics to pinpoint monetisation opportunities
  • Secondly, we deliver solutions:  We bring together assets, solutions and financing and deliver on-the-ground flare capture projects.  Our solutions are technically proven, scalable and commercially attractive. 

Such approaches will help Egypt to become a beacon of progressive leadership and demonstrate that delivering the global “well below 2 degrees” climate target is not only possible but also profitable.