Northern Alexandria Gas Project to Start in 2016

BP’s Northern Alexandria Gas Project is expected to start production in the summer of 2016, said Head of Egyptian Natural Gas Holding (EGAS) Taher Abd El-Reheem, reported Al-Borsa newspaper.

EGAS began negotiating plans with BP and BG Group (BG) that involve linking the Northern Alexandria Gas Project to the Al-Borlos treatment plant, said Daily News Egypt quoting from Al-Borsa news report.

All parties look to implement these plans before the completion of Metoubas’s station in Kafr El-Shiekh, which has a daily production capacity of 900 million cubic feet.

The project, which involves producing and treating gas in Idku, was met with several difficulties due to the failures in negotiations between the BP and BG, the news report said.

Total cost involved would be about $10 billion, with the production phase set to launch in 2014, operating in the deep sea 80 kilometres northwest of Alexandria, Al-Borsa said.

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.

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