Work on BPs gas project North Alexandria Concession has restarted and production is expected to begin in 2017, stated Egypts oil minister Sherif Ismail
BP's US$10bn North Alexandria Concession began in 2010 and had been stalled for three years. The company planned to restart the project by end 2014. Reports stated that officials from BP are expected to meet the Egyptian government in July to hold discussions regarding this.
The North Alexandria Concession, located offshore Alexandria, is expected to produce 12.7mn cu metres of gas per day in 2014, and 22.6mn cu metres of gas per day by 2018, according to Ismail. By the end of December 2014, production is expected to reach 5.2bcf per day. The output is expected to ease the nation's severe energy crunch, stated reports.
Political upheavals, followed by skeptical foreign investors have affected the country's gas production. Reports stated that Egypt would fail to meet the surging domestic demand in the next fiscal year, beginning July 1. Regular power cuts have forced companies to shut down factories or drastically slash production.
Now, the government said it would pay off debts to oil companies like BG Group and BP by the end of 2017, in an attempt to boost investor relations. Ismail added that Egypt has decided to pay back debts worth US$1.5bn to energy companies by 2014.
According to Reuters, the latest figures released by the Egyptian government put Egypt's debts to foreign oil companies operating in the country at US$5.7bn. However, officials have acknowledged that debts are mounting even as the government is paying off what it owes other companies.
Meanwhile, Algeria has agreed to ship five cargoes of LNG to Egpyt, stated Algerian energy company Sonatrach. The total amount of the Algerian shipments will be enough to meet around three days' worth of average daily consumption, stated Reuters. This would cover gas shortages that have resulted in regular power cuts in Egypt in 2014.
"Gas imports are planned for the next four to five years, until energy self-sufficiency is achieved," added Ismail.
