Decarbonization

The first panel under this session focused on decarbonization, discussing the ongoing and future decarbonization efforts of Egypt’s oil and gas sector, besides exploring the potential opportunities for learning and collaboration with the UK as a leading country in this regard.

The Minister remarked that Egypt was honored with hosting COP27, adding that the efforts undertaken by the Egyptian state include its persistence towards the inclusion of the oil companies during COP27 discussions behind the role they play in the green transition in introducing ways to reduce carbon emissions with new fluids companies and their invaluable experiences that can be utilized when using renewable energy technologies, in addition to the Ministry of Petroleum’s work with professionals to identify the areas where decarbonization efforts are further needed and the way forward to accelerating such transition through the development of a roadmap. Furthermore, during COP27, Egypt launched an Oil and Gas Methane Roadmap framework with core elements of a comprehensive methane reduction approach and is expected to complete a specific Oil and Gas Methane Roadmap for the country this year.

With the pressing implications of climate change and the need to rely on low carbon energy resources, oil reliance is expected to remain in place as the main source of energy in the world time till the green transition can be fully undertaken. Accordingly, the Minister reiterated that oil and gas products with less emissions will particularly aid in this transition phase and in order to expedite such transition, both the governmental and private sectors are required to integrate into the global discussion and collaborate their expertise, technology and resources to develop long-term mitigation and adaption strategies that limit the impact of climate change on the region.

To reach the ultimate goal of utilizing low carbon energy resources, Egypt aims to engage with companies providing innovative technologies to tackle such goal, besides seeking concessionary funds where the private sector gets to act as a catalyst to grow this industry and help different international ACAs to develop new technologies. On the financing front, UK Export Finance (UKEF), the United Kingdom’s export credit agency, remarked that they work on supporting projects in Egypt and across Africa that have transformed local infrastructure and supported livelihoods, where in 2021, UKEF provided a £1.7 billion guarantee to support the construction of the Cairo Monorail, one of the largest amounts of financing provided for an overseas infrastructure project in UKEF’s history. Tasked with redirecting funds to green projects in accordance to the Paris Agreement, UKEF has special terms such as applying up to 22 years of repayment for certain projects such as CCS, hydrogen, and solar projects.

Defined as low carbon fuels, the use of electric power and natural gas ─ a green transitional fuel ─ were amongst the list of achievements accomplished by the Egyptian state, where Minister Molla elaborated that Egypt has utilized and maximized the use of natural gas by turning its 40% natural gas contribution to the energy mix reached 20 years ago to record 65% now, behind the experienced growth in consumption, and the evolving economy. Egypt has also achieved a great stride in connecting more households to natural gas, whereby 14 mn households are now connected compared to the 6.5 mn households connected 20 years ago, largely due to natural gas being environmentally friendly and easy to use. The Government is also taking steps in increasing natural gas reliance across multiple national initiatives, namely with the inclusion of villages in the Decent Life Initiative and the introduction of the Car Replacement Initiative where the country now has around 900 stations providing natural gas. Such transition has not only aided the country in reducing fuel subsidies, CNG consumption and oil imports; but also in expanding the production and exportation of fertilizers and leveraging the petrochemical industries. With a great potential to produce green hydrogen particularly in the fertilizers business and in producing ammonia, Egypt has a multitude of presented opportunities that can be seized by the private sector whether across blending hydrogen with natural gas or increasing its carbon capture process.

Moderated by Mark Davies, CEO, Capterio, the session featured the following panelists:

• HE Tarek El Molla, Minister of Petroleum and Mineral Resources, Egypt

• Paul Gibbs, Global Head of Business Development, Bechtel

• Michèle Dée, Regional Head, UK Export Finance (UKEF)

• Alan Beere, Vice President Technical Consulting, Europe, Middle East and Africa WOOD Plc