The Northern Alexandria Gas Project, which is affiliated with British Petroleum (BP), will begin production in the summer of 2016, Head of Egyptian Natural Gas Holding (EGAS) Taher Abd El-Reheem said to Al-Borsa.
EGAS began negotiating plans with BP and British Gas Group (BG) that involve linking the Northern Alexandria Gas Project to the Al-Borlos Treatment Plant. Abd El-Reheem highlighted that the companies are trying to implement these plans prior to the completion of Metoubas’s station in Kafr El-Shiekh, which has a daily production capacity of 900 million cubic feet.
The BP project, which involves producing and treating gas in Idku, was met with several difficulties due to the failures in negotiations between the company and BG. Negotiations were concerned with reaching an agreement that would enable BP to use BG’s gas pipelines and treatment facilities. The suggested solution was an alternative to BP building a treatment plant in Idku, which was objected by Idku residents. Hence, an agreement was reached to establish the treatment facilities in Metoubas in Kafr El-Sheikh, with the required land to be assigned afterwards.
The project’s investments comprise nearly $10bn, with the production phase set to launch in 2014, operating in the deep sea 80 kilometres northwest of Alexandria. Based on the agreement, BP is to act as a contractor for EGAS. Thus, all production revenues will be given to the state, while BP will receive $3.1 to $4 per MBTU.
The agreement allows amending the pricing scheme every five years, with no cost recovery period for the foreign partner.
Abd El-Reheem noted that the capacity of the Al-Borlos Treatment Plant is two billion cubic feet per day. He added that the state’s gas production will increase by 100 million cubic feet per day by linking 13 gas fields in January. Another 50 million cubic feet will be added by linking 15 gas well next March.
Translated from AlBorsa Newspaper