By OGJ editors
HOUSTON, Apr. 23 -- Apache Corp., Houston, signed a 25-year sales agreement with the Egyptian General Petroleum Corp. (EGPC) for 2.1 tcf of natural gas from the Qasr field on Apache's Khalda Concession in Egypt's Western Desert.
Total revenue to both parties under the agreement would be $5.5 billion, net of estimated development and infrastructure costs, officials said. Apache owns 100% contractor interest in the Khalda concession.
"Principal terms include supplying 300 MMcfd to the Egyptian market, which more than doubles our current production of 275 MMcfd," said G. Steven Farris, Apache president, CEO, and chief operating officer. "All told, Apache has a market for 650 MMcfd of gas in Egypt."
Early production operations commenced under another agreement. "The latest agreement will provide the basis to reach the full contracted quantity during 2005," Farris said.
"Qasr is the most significant gas discovery in the Western Desert in the last decade and perhaps the most significant in Apache's history," he said. "It establishes the Western Desert as an important hydrocarbon province well into the 21st Century and provides energy for Egypt's further economic development."
Field development, final engineering design, and tendering operations are under way to accommodate 90 miles of new pipelines and other facilities to permit the most efficient use of existing gas processing capacity in the vicinity of the Qasr discovery.
"The Qasr-1X discovery was completed in July 2003 after Apache logged 606 ft of net pay in a 670-ft gross hydrocarbon column. Two appraisal wells—the Qasr-2X and Qasr-3X--add to our confidence regarding the ultimate size of the structure," Farris said.
The Egyptian government granted a 95-square-mile development lease.