Shell Approves Mina West Gas Project in Egypt's Mediterranean Waters

Shell has taken a final investment decision to develop the Mina West offshore natural gas field in Egypt's Mediterranean waters, which will help reduce Egypt's dependence on liquefied natural gas imports. The project is expected to increase Egypt's natural gas production and contribute to the country's energy security. The development of the Mina West field is a significant step towards Egypt's goal of becoming self-sufficient in natural gas production.

Shell has taken a significant step towards bolstering Egypt's energy security by taking a final investment decision (FID) to develop the Mina West offshore natural gas field in Egypt's Mediterranean waters. The project, which was discovered in October 2023, holds an estimated 0.5 trillion cubic feet (tcf) of gas [1].

The Mina West gas field will be developed as a subsea tie-back to the existing infrastructure of West Delta Deep Marine (WDDM), following an infrastructure-led development approach. This approach is expected to support the delivery of reliable energy to Egypt's domestic gas market [2].

Shell, through its subsidiary BG International, will hold a 60% stake in the project, with KUFPEC (Egypt) Limited owning the remaining 40%. The duo will collaborate with the Egyptian Natural Gas Holding Company (EGAS) to bring the project to fruition [3].

The project is part of Shell's broader strategy to create more value with less emissions. Dalia ElGabry, Vice President and Country Chair of Shell Energy Egypt, stated, "Investing in new production at Mina West expands our industry-leading integrated gas business and supports delivery of secure, reliable energy to Egypt’s domestic market in line with our strategy to create more value with less emissions" [1].

The Mina West project is expected to deliver early gas volumes to Egypt’s domestic grid while supporting Shell's goal of expanding integrated gas production by 1% annually through the decade. The project is also anticipated to generate an internal rate of return (IRR) in excess of the hurdle rate for Shell’s Integrated Gas business [3].

Egypt's efforts to boost its energy independence are gaining momentum. The Mina West project is part of the country's broader strategy to reduce dependence on liquefied natural gas (LNG) imports and declining production from legacy fields. By using existing underwater pipelines and facilities, the project can move faster and cost less, making it vital to easing pressure on Egypt’s gas supply [4].

The Mina West approval also comes amid renewed upstream interest in Egypt’s offshore blocks. Multiple license rounds have drawn fresh attention to the North Alexandria and Herodotus basins, where technical evaluations suggest untapped potential. With the government prioritizing fast-track development and infrastructure tie-ins, Shell’s decision is widely seen as a first mover advantage in a broader competitive cycle aimed at restoring Egypt’s role as a gas export hub [4].

References:

[1] Shell signs off on Egypt's Mediterranean gas project. Offshore Energy. Available at: https://www.offshore-energy.biz/shell-signs-off-on-egypts-mediterranean-gas-project/
[2] Shell to move forward on Mina West gas project in Egypt's Mediterranean waters. Seeking Alpha. Available at: https://seekingalpha.com/news/4472519-shell-to-move-forward-on-mina-west-gas-project-in-egypts-mediterranean-waters
[3] Shell invests in Mina West gas development in Egyptian Mediterranean sea. Zawya. Available at: https://www.zawya.com/en/press-release/companies-news/shell-invests-in-mina-west-gas-development-in-egyptian-mediterranean-sea-hlgovb27
[4] Shell greenlights Egyptian gas project to bolster domestic supply. OilPrice.com. Available at: https://oilprice.com/Latest-Energy-News/World-News/Shell-Greenlights-Egyptian-Gas-Project-to-Bolster-Domestic-Supply.html