Image courtesy of UFGUnion Fenosa Gas (UFG) said its negotiations with the Egyptian government over the restart of the Damietta liquefied natural gas (LNG) export plant are ongoing, however, no agreement has yet been reached.
Progress has been made but the guarantees offered are not sufficient to reach the comprehensive agreement required to bring the dispute to its end, UFG said in a statement on Tuesday.
The company, a 50/50 joint venture between Spain’s Naturgy and Italy’s Eni, has recently won the dispute at the International Center for Settlement of International Disputes.
The World Bank arbitration body ordered the Egyptian government to pay the $2.01 billion arbitration award to UFG because Egypt restricted gas flows to the facility diverting export volumes to its domestic market.
In its statement, UFG said it is committed to reaching an “agreement with the Egyptian government and the state-owned companies based on the compensation for the damages caused, the restoration of gas supply to the Damietta LNG plant and the guarantees of future compliance with the contracts.”
Given the information published in some Egyptian media outlets in the past few days, regarding the alleged agreement between the Egyptian Gov’t and UFG to settle the dispute, UFG denies that any settlement has been reached, the statement reads.
UFG inked the first export deal from the Damietta plant in 2000, that had a 25-year term with volumes of up to 4.4 billion cubic meters per year.
The facility has a processing capacity of up to 7.56 bcma and is 80 percent owned by UFG and 20 percent owned by the Egyptian national companies, EGAS and EGPC.