BG Group, the biggest supplier of liquefied natural gas to the US, said it planned to spend more than $3 billion exploring for and producing natural gas in Egypt by the end of the decade, according to reports by Bloomberg.
Ian Hewitt, BG Group’s director in Egypt, also urged the local government to pay more for the gas it buys from producers like BG Group. “Gas is sold at a relatively low price in the domestic market in Egypt, with the gas price capped at an oil equivalent of around $22 a barrel, Hewitt told a conference in Cairo yesterday.
“When the global oil price is $60 to $70 a barrel, and when the cost of developing new reserves has more than tripled, I would question whether this is sustainable.
BG Group, based in Reading, England, is producing gas now from fields near Egypt’s Mediterranean coast. It supplies 40 percent of Egypt’s domestic consumption of gas and has exported $1bn worth of the fuel a year since 2005, accounting for 10 percent of the nation’s total exports and 1.5 percent of its gross domestic product, according to company figures.
Petroleum Ministry Sameh Fahmy said he was willing to study the request to pay more for gas. “This issue is very important, we are trying to be very reasonable, he told reporters at the conference.
BG holds five concessions in Egypt, from which it is producing gas for the ELNG project and for the domestic market, according to the company’s website.