Azerbaijan, Baku, Sept. 13 / Trend A.Badalova /
The deterioration of the security situation in Egypt makes the perspectives of the country's becoming an additional supply source for the Southern Gas Corridor challenging, Editor-in-Chief at Eurasia Energy Observer Andrej Tibold believes.
Tibold said that there are several factors which hamper the country to become a supplier for the Southern Gas Corridor project.
"Unfortunately, Egypt seems to be gliding slowly into a spiral of violence and civil war. This is leading to a deterioration of the security situation and investment climate, not just in Egypt but in the region as well," Tibold wrote Trend via e-mail.
This week BP announced a significant gas discovery in the East Nile Delta. The reserves estimations were not revealed. However, reportedly, early results are encouraging.
Repeatedly Egypt was considered as a possible additional source for the Southern Gas Corridor project, which envisages transportation of Caspian gas to the European markets. Gas to be produced during the second stage of Azerbaijani Shah Deniz field development is considered as the main source for the project.
According to Tibold, deterioration of the situation in the country is bad news for large scale investments, which will be needed.
"Regional infrastructure is increasingly being targeted, and it is not limited to pipelines, as a recent attack on Tankers in the Suez channel illustrates," Tibold stressed.
At least, an onshore solution, whereby Egyptian gas would go via the Arab gas pipeline through Jordan and Syria into Turkey, seems unlikely for the time being, and in particular, given the situation in Syria, Tibold believes.
"As the conflict there seems to have reached a stalemate, it makes no sense to think about Egyptian supplies into the Southern Corridor via Syria," Tibold added.
What perhaps seems as a better solution is to opt for an LNG exports. This would also give an access to global markets and limit exports to Europe, Tibold believes.
According to BP, Egypt's proved gas reserves amounted to 4.5 trillion cubic metres in early 2013. In 2012 the country's gas production hit 60.9 billion cubic metres.