Apache, Shell Sign Fracking Deal With Egypt

Egypt has signed a deal with Apache Corporation and Shell Egypt to extract unconventional hydrocarbons by fracking in the Western region , oil ministry announced Wednesday.

Tariq Al Mulla, Chief Executive of EGPC and Tom Maher, President of the US based Apache Corporation and Aiden Murphy, Chairman of Shell Egypt, signed the contract.

The project will entail investments of around $30-40 million along with drilling three horizontal wells, the ministry said adding that this project will open up new horizons for the Western Desert region for the production of unconventional gas.

Egypt has been facing shortage of natural gas due to rising domestic demand amid declining output. Cairo is looking to fill the demand gap by sourcing LNG from suppliers such as Algeria.

Earlier this month, Egypt agreed to import six cargoes of LNG from Algeria between April and September next year. The agreement regarding this would be signed by the end of this month in Algeria, Egypt’s oil ministry said.

To allow for smooth import of the fuel, last month, Egyptian Natural Gas Holding Company (EGAS) finalised a five year deal with Norway’s Hoegh LNG for supply of FSRU by the end of first quarter of 2015.

In May this year, Höegh LNG signed a Letter of Intent (LOI) with EGAS for the use of one of its FSRU as an LNG import terminal in the port of Ain Sokhna, located on the Red Sea's Gulf of Suez.

The FSRU was scheduled to start operations in the third quarter of 2014 but was delayed.