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* For other news from Reuters Middle East Investment Summit,click on http://www.reuters.com/summit/MiddleEast16
* Egypt sees gas output at 5 bln cubic feet per day in 17/18
* Egypt expects to receive third FSRU in June 2017
* Egypt's current gas production 4.35 bln cubic feet per day
* Egypt's current gas consumption 5.2 bln cubic feet per day
* Egypt spent 12-13 bln pounds on petrol subsidies in Q116/17
By Ehab Farouk
CAIRO, Oct 23 (Reuters) - Egypt will boost production ofnatural gas to 5 billion cubic feet per day in the 2017-2018fiscal year as the giant Zohr field comes online, but will stillalso ramp up gas imports to feed a spike in consumption, OilMinister Tarek El Molla said.
Once an energy exporter, Egypt has turned into a netimporter in recent years, squeezed by declining production andincreasing consumption. The shortfall and squeezed finances haveforced the government to ration gas supplies to industry, withsome plants unable to operate at full capacity as a result.
Egypt's Oil Ministry is racing to reverse that trend,speeding up the development of major gas discoveries with astated goal of achieving energy self-sufficiency by 2020-21.
Next year Zohr, the offshore field discovered by Italy's Eni in August 2015, comes online. Zohr is the biggest gasfield in the Mediterranean with an estimated 30 trillion cubicfeet.
Further boosting supply, BP's northern Alexandriafield is also due to enter production next year.
"Eni will begin producing about 1 billion cubic feet a dayfrom Zohr at the end of 2017 and there is also the production ofBP at around 450 to 500 million cubic feet a day," he said at Reuters Middle East Investment Summit.
"We're still looking to have (gas) production reach over 7.5billion cubic feet in 2020-21, and this will allow us to achieveself-sufficiency."
Zohr is expected to produce 2.5-3 billion cubic feet per daywhen it reaches peak production in 2019.
Egypt's domestic gas production is currently about 4.35billion cubic feet per day versus consumption of around 5.2billion, Molla said.
Egypt's gas company EGAS will also launch a new explorationtender in early 2017, offering nine to 11 concessions, as partof efforts to boost production, the minister added.
But even with the expected increase in production to 5billion cubic feet of gas per day, Egypt's gas production islikely to fall far short of rapidly growing consumption in the2017-2018 fiscal year, which begins in July.
Gas consumption is set to spike as three Siemens power plants come online over the next year designed to boostelectricity generation by 50 percent by 2018.
LNG IMPORT BOOM
Egypt has emerged as a major buyer of liquefied natural gas(LNG).
State gas buyer EGAS said last week it would hold aninternational tender for 48 to 56 LNG cargoes, the first batchof roughly 120 cargoes expected for 2017.
A third floating and storage regasification unit (FSRU), animport terminal that converts LNG to natural gas to feed thepower grid, is expected to arrive at the end of June 2017 andwill help process the surge in gas needed once the Siemensplants enter the energy grid, Molla said.
Egypt is expected to begin imports from France's Engie in early 2017 as part of a previously agreedmemorandum of understanding to buy 12 cargoes, Molla said.
Molla said the import bill for LNG this year would beroughly $3 billion and that Egypt spends some $700-$800 millionon both LNG and petroleum products monthly.
That bill rose sharply in October after Saudi Aramco halteddelivery of petroleum aid agreed as part of a five-year plan toease Egypt's energy spending.
State petroleum buyer EGPC said it would allocate over $500million to cover its October needs after the cutoff. The statusof the aid and reason for its halt remain unclear.
The state's 2016-17 budget had aimed to reduce subsidyexpenditure, targeting 35.04 billion Egyptian pounds from the 51billion spent in 2015-16.
But the rise in oil prices in recent months will increasethe state's subsidy bill, which was about 12-13 billion Egyptianpounds ($1.4-1.5 billion) during the first quarter of the2016-17 fiscal year, Molla said.
"The rise in oil prices worldwide will no doubt changesubsidy spending, because a third of what we consume we import,so the bill will increase," he said.($1 = 8.8799 Egyptian pounds)
Follow Reuters Summits on Twitter @Reuters_Summits (Writing by Eric Knecht, Editing by Lin Noueihed/RuthPitchford)
