EGPC paid $480m of bank instalments to EDCO

Mohamed Adel
2 Min Read

The Egyptian General Petroleum Corporation (EGPC) paid approximately $480m in bank instalments to EDCO liquefaction plant, affiliated to Royal Dutch Shell, which ceased operating at full capacity in 2012. This did not result in the foreign partner (Shell) raising an international arbitration case against Egypt.

A source in the petroleum sector told Daily News Egypt that EDCO repays annual bank instalments amounting to about $200m, out of a loan obtained by the company to implement pipe units worth $2bn.

The source added that in order to achieve self-sufficiency between revenues and expenditures, EDCO needs to export about 22 shipments of liquefied gas annually.

The government is planning to allow EDCO to import liquefied gas from Cyprus to re-run it at full capacity in order to achieve economic returns for the state and foreign partners by 2020, according to the source.

The source also stated that EDCO is currently working at about 11% of its total capacity since the beginning August, after an agreement between Shell and the Ministry of Petroleum to provide 125m cubic feet of gas a day to EDCO.

Those quantities will allow Shell to export a monthly liquefied gas shipment to global markets through EDCO, after a hiatus of more than two years, the source added.

The source noted that the contractual share of EDCO reached 1.13bn cubic feet of gas per day. Pumping rates decreased since 2011, until they finally stopped at the beginning of 2015.

EDCO is designed to run for 340 days a year, and stops production for one month for maintenance. Maintenance costs are estimated at $20m annually, said the source.

The source explained that the government contributes to EDCO, represented in EGPC’s share of 12% and the Egyptian Natural Gas Holding Company (EGAS). This is in addition to British Gas’ share of 35.5%, Petronas’ share of 35.5%, and Gaz de France’s (GDF) share of 5%.

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