Japan has been investing large amounts of capital in energy related projects and corporations overseas including coal mining companies. Recently, what is considered to be the largest natural gas deposit in the world (“super giant”), was discovered by the Italian energy company Eni. This deposit is located off the coast of Egypt in the Mediterranean. The Italian company Eni said “the area was 1,450m (4,757 feet) beneath the surface and covered 100 sq km (39 sq miles). The gas deposit could hold as much as 30 trillion cubic feet of gas, or 5.5 billion barrels of oil equivalent.” Without losing momentum and as expected, the Japanese were immediately there after the announcement of this huge gas discovery through the The Japan Bank of International Cooperation (JBIC), which invested US$500 million through HSBC’s Tokyo branch in gas drilling and infrastructure development. I can already sense the country of Qatar after hearing of this news. Qatar must be extremely nervous after hearing of this discovery off Egypt’s coast by Eni. And what about the people of Egypt? Will they benefit from this large gas discovery just as the people of Qatar are benefiting by having access to free electricity and water? Most of Qatar’s natural gas is processed into LNG which increases the costs of shipping.
Japan is Qatar’s biggest customer of LNG. In 2012, Japan consumed 4.4 trillion cubic feet (Tcf) of natural gas, up 50% from the 2000 level. More than 95% of Japan’s gas demand is met by liquefied natural gas (LNG) imports. Japan, the world’s largest LNG importer in 2012, accounted for 37% of global LNG demand in 2012, up from 33% in 2011. This gas discovery in Egyot is going to put a lot of crimps on countries in that region of the world especially Israel that was counting on selling their own gas to other countries including Egypt. Imagine now after five years of the destruction of Syria in what has been erroneously called a “civil war”, who will be benefiting off of infrastructure and construction projects on pipelines for natural gas out of Syria? The other aspect that should also be realized is the relationship between Qatar and Japan if Japan begins buying gas from Egypt at lower costs? Can anyone imagine the corporate intelligence infrastructure Japan has set up in the region around the Middle East benefiting off cheap energy especially gas which is at very low prices?
This news appeared at
Daily News Egypt
JBIC extends loans to Egyptian energy companies
Hydrocarbon, infrastructure sectors are most promising sectors in Egypt, says Middle East Chief Representative
Shaimaa Al-Aees September 5, 2015
The Japan Bank for International Cooperation (JBIC) has extended its loans to the Egyptian Offshore Drilling Company and Egyptian Refinery Company (ERC), according to Naoki Tamaki, Middle East Chief Representative at JBIC.
Tamaki told Daily News Egypt the bank is interested in the hydrocarbon sector, adding that the hydrocarbon and infrastructure sectors are the most promising sectors in Egypt. He added that the Egyptian market needs to be watched closely, especially in this period, as it has huge potential.
“We are satisfied with the current direction, and we would like to support the development of Egypt,” Tamaki said.
In his vision to the Egyptian market’s incentives to attract more investment, Tamaki said that stability, transparency, and efficient process of administrative matters are the most important incentives needed by investors.
Tamaki expects that the New Suez Canal would increase government revenue and make government credit healthier. He added that, if Japanese companies are interested in the Suez Canal Axis, the bank would support them.
“As we are a Japanese governmental financial institution, if Japanese companies are involved as a direct exporter or investor in solar power plants in Egypt, we are happy to consider,” said Tamaki.
The JBIC is interested in supporting Japanese companies in Egypt, he said, while he expects that MoUs would be signed in the energy and infrastructure fields during Egyptian President Abdel Fattah Al-Sisi’s expected visit to Tokyo.
On 8 June, JBIC’s Executive Managing Director Koichi Yajima met Egyptian Prime Minister Ibrahim Mehleb to discuss Egypt’s investment and tourism promotions , amongst other issues.
Yajima expressed the bank willing to provide facilitated loans to finance power generation projects through new energy sources such as wind, or clean coal. He added that the JBIC is interested to strengthen their presence in the Japanese automotive industry in Egypt.
In 2010, the JBIC funded the metro station project with a total of ¥7.9bn in investments, in addition to financing the ERC with a loan of $900m.
On 25 September 2008, the bank signed a loan agreement totalling up to $500m with the Egyptian Offshore Drilling Company. The loan was provided in a co-financing agreement with a bank syndicate led by HSBC’s Tokyo Branch and others as lead arrangers.