Egyptian LNG deal

Gaz de France will buy 3.6 million tons of Egyptian sourced liquefied natural gas a year over the next 20 years in a deal with BG, the UK based international gas group and BG’s partners from Egypt and Italy. The value of the total supply deal is put at USD 8 billion. The Egyptian gas will provide 10% of Gaz de France’s supplies by 2006 or 2007. It is the first sale of gas by BG from reserves found in the West Delta Deep Marine concession. A USD 900 million liquefied natural gas processing plant at Idku, east of Alexandria, is being built by BG, Edison International of Italy, and their Egyptian partner and Gaz de France’s agreement to take the total output of the first train of the unit is critical to the viability and ongoing success of the project. The French company will take 5% equity in the consortium led by BG, which has plans to expand the processing facility to process other users’ gas. Two more liquefied gas processing plants are due soon. Union Fenosa of Spain is building a plant to supply their home market and BP and ENI are planning the third plant east of the Nile.

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