CAIRO: BG Egypt, a subsidiary of British Gas Group, signed a tie-in agreement with BP Egypt and RWE DEA, which will increase energy supplies to Egypt’s domestic network by using BG Egypt’s infrastructure, BG announced Wednesday.
Such agreements would help meet growing energy demands in Egypt, which has been witnessing a sharp energy shortage over the past four years that has caused daily power cuts, with the crisis taking a severe turn for the worse last summer.
Under the new agreement, BP/RWE Dea’s Libra and Taurus fields, located largely within North Alexandria Concession, offshore the Nile Delta, will be connected to BG Egypt, the biggest natural gas producer in Egypt, and partner PETRONAS West Delta Deep Marine (WDDM) offshore infrastructure, according to a statement from BG Egypt.
Gas from Libra-Taurus will be processed at the BG Egypt-operated WDDM onshore facilities, and is expected to start producing in mid-2017 at rates of around 600 mmscfd, added the statement, without revealing further details or the deal value.
“BG Egypt is working closely with the Government of Egypt and our partners to enable the increase of third party gas supply into the country, a reflection of our appreciation of the country’s need for energy,” BG Egypt’s President Arshad Sufi commented in the statement.
Sufi added, “These agreements will enable the development and delivery of additional gas volumes to Egypt’s domestic gas market, through the utilization of BG Egypt’s and our upstream partners’ onshore and offshore infrastructure.”
In December, BG Egypt Celebrated 25 Years of Investment in Egypt; the company has invested more than $14 billion along with its partners over the past 25 years.
Sufi said in his speech at this event held in Alexandria, “Our commitment was tested over the last three years through investing more than $3.5 billion in operations’ development while the country was struck by political and economic unrest.”
Earlier in January, BG received a further payment equivalent to $350 million, cutting the company’s domestic receivables in Egypt to around $920 million. This was the second after October’s $350 million installment.
Egypt raised funds worths $2 billion to help provide the required finances for the repayments, to encourage foreign companies to boost exploration and production, in order to ease its energy shortage.