Union Fenosa Gas (UFG) came out as the winner in its arbitration against Egypt. A World Bank arbitration body ruled that Egypt must pay $2 billion to UFG to settle a dispute over halted natural gas supplies in the early 2010s.
UFG is a JV between Spain’s Naturgy and Italy’s ENI. It operates the Damietta LNG plant on Egypt’s Mediterranean coast.
The company took the country to court in 2014 to claim compensation and hold Egypt accountable for the interruption of gas supplies to the LNG facility, one of two LNG plants on Egypt’s North coast, after supplies to the plantwere suspended in order to divert them for domestic consumption.
“UFG expresses its great satisfaction with the outcome of the award since it reinforces its confidence in the final resolution of this long dispute and allows the company to reaffirm its commitment to Egypt and its willingness to continue its operations in the country generating wealth, welfare and social development,” the JV said in the statement.
The case was adjudicated by the International Center for Settlement of International Disputes (ICSID) which forms part of the World Bank.
UFG signed the first gas export contract in Egypt in 2000; a long-term contract with an initial term of 25 years for the supply of gas up to 4.4 Bcm/y.
The Damietta plant, with a processing capacity of up to 7.56 bcm/y, is owned 80% by UFG and 20% by the Egyptian national companies, EGAS and EGPC.source: Africa Petroleum