Eni announced that Damietta LNG export plant, idled since November 2012, will restart by June of this year, after an amicable resolution to an eight-year dispute between investors (Eni and Naturgy) and the Egyptian government.
The Italian operator has said that it settled disputes between Union Fenosa Gas (UFG) and Segas with EGAS and Egypt, although it didn’t say if the government will pay the arbitration claim previously awarded to Naturgy.
Under a new deal, Naturgy will leave the JV and the participation of UFG in the Damietta plant (80%) will be transferred to Eni (50%) and to EGAS (30%) so the shareholders in Segas include Eni 50%, EGAS 40% and EGPC 10%.
Eni will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights, thus increasing the volumes of LNG in its portfolio by 3.78 BCM/Y, which will be available on an FOB basis, with no destination restrictions.
Naturgy said that as part of the agreements, it will receive $600 million in cash and most of the UFG’s assets outside Egypt. Commercial activities in Spain will now be owned by Eni. It will have no obligation in the future to buy LNG from Egypt, which the company sees as an important step to gradually reduce its exposure to gas procurement contracts. It also solves a complex situation which had lingered since 2012, consuming significant time and resources.
“We are simplifying Naturgy’s geographical presence to focus on those areas that maximize the creation of long-term value of our main businesses with the company’s stakeholders in mind,” commented the Spanish company’s CEO Francisco Reynes.

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Updates:

On 23 Apr. 2020, Naturgy said that a deal struck between it, Eni and the Egyptian government to resolve a series of disputes over a shuttered Damietta LNG plant has fallen through as “the agreement was based on a series of conditions which had not been met, but that it was still open to seeking a friendly solution to the dispute.”
The first condition of the agreement was that the plant would reopen, but it was impossible to do so because of restrictions on movement and industry worldwide to curb the spread of the novel coronavirus, a person familiar with the matter told Reuters.
In the meantime, Naturgy said it would go back to pursuing a legal claim to $2 billion in compensation its joint venture with Eni was awarded in the case by the World Bank’s International Centre for Settlement of Investment Disputes in 2018.