ENI and Egypt Announce Major Gas Discovery as Regional Conflict Drives Energy Costs Higher

ENI and Egypt have revealed a substantial natural gas discovery in the Eastern Mediterranean, a development that could provide much-needed relief for Cairo and potentially support energy supplies in Europe as the ongoing Iran war continues to drive up import costs. The Italian energy group confirmed the find in a statement on Tuesday, highlighting its significance at a time when energy markets remain under intense pressure.

Initial estimates suggest the Temsah field, located offshore along Egypt’s Mediterranean coastline, contains approximately 2 trillion cubic feet of natural gas. In addition, Egypt’s petroleum ministry reported that the discovery also includes around 130 million barrels of petroleum condensates. Officials indicated that the find forms part of a broader national strategy aimed at increasing domestic production while reducing reliance on costly imports.

The Denise W well is currently being readied for testing, marking the next phase in evaluating the field’s potential. Following this process, further wells are expected to be drilled, and plans are in place to construct an offshore production platform before the field can begin operations. Denise W 1, the exploratory well, was drilled within the Temsah Concession, situated roughly 70 kilometres offshore in waters about 95 metres deep and less than 10 kilometres from existing infrastructure, which could facilitate faster development.

The project is operated by ENI, which holds a 50 per cent working interest, in partnership with BP, which owns the remaining stake. The two companies are collaborating through their joint venture Petrobel.

The timing of the discovery is particularly critical. Egypt has been grappling with severe disruptions to its natural gas supplies from Qatar and Israel as the Iran war has intensified, forcing authorities to implement a range of energy-saving measures. These have included the introduction of a business curfew, increases in fuel prices, and a slowdown in government expenditure. Prime Minister Mostafa Madbouly noted last month that the conflict had dramatically increased Egypt’s gas import costs, with the monthly bill rising from $560 million (€515mn) to $1.65 billion (€1.52bn).

The latest discovery inevitably draws comparisons with Egypt’s landmark offshore success in 2015, when the Zohr field—recognized as the largest in the Mediterranean with an estimated 30 trillion cubic feet of gas—sparked expectations that the country could achieve energy self-sufficiency and emerge as a major exporter. However, those ambitions have since been tempered. Egypt has instead repositioned itself as a regional energy processing and transit hub, leveraging its liquefaction facilities to handle gas from neighbouring producers, including Cyprus.

The Temsah announcement follows another recent discovery made onshore. Just last month, Egypt and Apache Corporation confirmed a find in the Western Desert that is expected to produce around 26 million cubic feet of gas per day.

Whether the Temsah field will be large enough to significantly alleviate Egypt’s ongoing energy challenges remains uncertain. Its impact will depend largely on how quickly production can be brought online and the duration of the current regional conflict, which continues to weigh heavily on energy supply chains and import costs.

By fLEXI tEAM