18 things to watch in 2018

As we rush headlong into another New Year, here's the Egypt Energy Monitor's list of 18 things to look out for in 2018.
This could be a landmark 12 months for the country's energy and power sectors, with an abundance of news and opportunities to follow across all segments of the market.


Hamrawein award
The winner of an EPC+Finance deal for the proposed 6GW coal plant in Hamrawein should be announced early this year. It will either be a consortium of Shanghai Electric and Dong Fang, GE/Harbin, or a grouping of Japanese companies led by Mitsubishi-Hitachi Power Systems (MHPS).
Timelines on the project have already been put back, however, and could well be delayed further. The plant, which would be Egypt's first coal-fired facility, is not expected to begin operations until at least 2025.
Electricity subsidies are expected to be cut progressively over the next few years, meaning more price hikes for consumers. How much will rates increase in the 2018/19 fiscal year budget?
Siemens gas plants
Some 6.4GW of gas-fired capacity has already started commercial operations across the three new Siemens-led plants at Burullus, Beni Suef and the New Capital. All are expected to be fully completed this year, adding a total 14.4GW of capacity.
Egypt-Saudi interconnection
What progress will be made on signing contracts for the delayed interconnection project? Three main packages are up for grabs, namely substations, transmission lines, and cables.
Cairo West and Walidia
Work is set to continue on the Cairo West and Walidia conventional power projects with four contracts having been signed recently for tank yards, switchyards, and mechanical work. These contracts are expected to be delivered between 29 and 32 months from now.
With formal contracts now essentially signed, observers will be watching progress on planning the Rosatom-led nuclear plant on Egypt's north-west coast.


600MW PV tender
Some 20 firms have reportedly expressed interest in the 600MW PV project recently tendered by the EEHC. Proposed on a BOO basis, the solar plant will be located in the West Nile area and operated under a 25-year agreement. Names said to have purchased tender documents include ACWA Power, SkyPower, Scatec Solar, Masdar, PowerChina, Elsewedy-Marubeni and Tebian Electric Apparatus (TBEA).
Benban FiT projects
We understand that all 30 second-round FiT projects that met financial closure in October will be approved in early 2018, with construction work then to start soon afterwards. Total capacity in the second round is about 1.5GW across 20-50MW projects, carrying an expected cost of some $1.5bn. 
Meanwhile, the two 50MW PV plants going ahead under the (more lucrative) first round of the Feed-in Tariff scheme, led by Infinity Solar and FAS, are also expected to be completed in the first half of 2018.
Larger-scale wind plants
NREA is expected to award an EPC contract to one of the shortlisted firms (Vestas, Siemens, Enercon, and Senvion) for the 200-250MW Gulf of Suez wind farm tender. It's not clear exactly when the winner will be named, or what the subsequent timetable could be. 
Meanwhile construction is expected to move forward on the $400m, 250MW Gulf of Suez wind farm being planned by the Toyota-Engie-Orascom consortium.
The consortium signed the final agreement for the project with the EETC in October and reached financial closure in December. Siemens Gamesa Renewable Energy recently won a contract to supply turbines for the scheme.


New bid round(s)
There have been numerous reports and rumours about dates for new onshore and offshore bid rounds this year.
In a recent statement, petroleum minister Tarek el-Molla said that a bid round for the Red Sea and Upper Egypt would take place as soon as geophysical surveys were complete, while another round for the Nile Delta and Mediterranean is expected for nine offshore blocks by the end of 2018, the Egypt Energy Monitor understands.
A further set of blocks could be auctioned in the Western Desert and Gulf of Suez early this year.
Zohr output
Output from the first phase of the Zohr gas field is expected to rise to one billion cubic feet per day (bcfd), by mid-2018 up from the current 350 mcfd. Production started in December. Also worth watching is progress on the second phase of the project, with Eni reportedly planning to drill new wells sometime this year.
Fuel prices
Fuel subsidies may increase again this July with the start of the new fiscal year. As with electricity, the government is following a programme to eliminate subsidies entirely in the coming years. The extent of the price hikes may also depend on global oil prices, which have jumped sharply in the past few months.
IOC repayments
A healthy chunk of overdue receivables - over $2bn - was paid back to international oil and gas companies last year. More is set to follow in 2018 as the government tries to encourage more exploration and development spending, and is able to draw on its increased foreign reserves.
KIMA 2 completion
Over 80% of work at the KIMA 2 facility in Aswan is now complete, despite delays. It should be finished sometime this year.
ERC start-up
The $3.7bn Egyptian Refining Company (ERC) project in Cairo will transform Egypt's fuel supply dynamic once it comes online. Pushed back several times, it's now set to start-up in the second half of the year. Fuel import bills should be slashed by some $300m as a result.
Other offshore gas output
Production from the Giza and Fayoum fields, part of the BP-led West Nile Delta (WND) project, is expected to reach 500-700 million cubic feet per day (mcfd) after three new wells in the fields enter production late this year.
Meanwhile the Atoll field is also set to enter full production this year, with trial operations having started at 300 mcfd last month. Work at the field was said to be 93% complete as of November.
MIDOR expansion
The Middle East Oil Refinery (MIDOR) is aiming to finally start work this year on the expansion of its 100,000 barrels per day (bpd) design capacity refinery in Alexandria. The upgrade should raise capacity to close to 175,000 bpd, although exact figures have varied.
LNG imports to end?
Petroleum minister Tarek el-Molla has said that Egypt is aiming to halt all LNG imports by the end of this year. The country started importing LNG for the first time in 2015, and had initially leased its two Floating Storage and Regasification Units (FSRUs) at Ain Sokhna until 2020. The turnaround is largely thanks to quicker-than-expected output at offshore gas fields.


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