BG-EGPC Egyptian LNG export project moves ahead

Britain's BG Group PLC Monday signed a deal with Egyptian General Petroleum Corp. and Italy's Edison International SPA for an integrated liquefied natural gas export project in Egypt. The project will develop discovered, uncontracted gas reserves in the West Delta Deep Marine concession off Egypt and build a $900 million liquefaction plant on the coast.


By the OGJ Online Staff

LONDON, Apr. 9�Britain's BG Group PLC Monday advanced plans for an integrated liquefied natural gas export project in Egypt with the signing of a commercial agreement with Egyptian General Petroleum Corp. and Italy's Edison International SPA.

The project will involve development of discovered, uncontracted gas reserves in the West Delta Deep Marine concession off Egypt in the Nile Delta�home to the deepwater Scarab-Saffron fields�along with the construction of a $900 million onshore liquefaction plant at Idku on the Mediterranean Sea coast.

BG said the deal signed also covers proposed amendments to the existing WDDM concession agreement, which will be subject to ratification by the Egyptian government, and sets the commercial framework for the LNG export development.

"Negotiations are progressing with key potential customers, which will now be stepped up in close cooperation with EGPC and Edison," said BG. The UK company said it expected project sanction to follow completion of the front-end engineering design studies, being managed by US company Bechtel Inc., and the conclusion of an LNG sales agreement for the first train.

Scarab and Saffron fields are being developed for the domestic market. The associated Simian, Sapphire, Sienna, and Serpent discoveries would support the LNG project. First gas from Scarab-Saffron, the largest gas field development in Egypt, is scheduled for January 2003.

As part of the integrated development of the WDDM concession, BG is having higher capacity offshore pipelines installed in order to support a potential two-train LNG development, while supplying the domestic market from Scarab/Saffron.

Plans are for the LNG liquefaction plant to be located at Idku, near Alexandria, adjacent to the Rosetta and Scarab-Saffron gas processing terminals. BG envisages the Idku facilities will form an Egyptian gas hub with its own port facilities.

Rosetta field, which is producing 275 MMscfd, began supplying the Egyptian national grid Jan. 31.

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