BG signs purchase agreement with Gaz de France for Egyptian LNG
The BG Group and partners have announced that the liquefied natural gas (LNG) Sale and Purchase Agreement (SPA) for the sale of the entire output of Train 1 of the Egyptian LNG (ELNG) project has been signed with Gaz de France. A Participation Agreement, which anticipates Gaz de France becoming a partner in the ELNG project, has also been signed.
Under the SPA, Gaz de France will purchase 3.6 million tons of LNG per annum - the full output of Train 1 for a 20-year period. Under the Participation Agreement, Gaz de France will acquire a five percent ownership in ELNG.
Last month, BG and partners issued the Notice to Proceed under the Engineering, Procurement and Construction (EPC) contract with Bechtel Corporation for construction of the ELNG plant Train 1 and common facilities, valued at approximately $900 million. An invitation to lenders to project finance the construction of the ELNG plant Train 1 and common facilities was issued.
Bechtel started an early works program in and first LNG production is scheduled for the third quarter of 2005. Engineering is well advanced, equipment with long delivery times has been ordered, and site work has started with more than 500 workers preparing the site for civil engineering and construction works.
The ELNG plant, located at Idku, approximately 50 kilometers east of Alexandria, will be a tolling facility and will provide a liquefaction service to BG and its partners in the West Delta Deep Marine Concession (WDDM) including Edison International and the Egyptian General Petroleum Company (EGPC). The Concession partners are the gas sellers under the SPA.
A commercial structure will allow third parties to invest in future LNG production trains at the site. The Idku site has space for up to six LNG trains. The WDDM gas sellers are marketing the output of the proposed Train 2 to potential buyers in Europe and the USA and expect to finalise a Heads of Terms agreement for the sale of this output by the end of 2002.
BG Group has been active in Egypt for over ten years and has invested in both the upstream and downstream sectors. Significant projects include development of the offshore Rosetta Concession, which came on-stream in 2001 and delivers gas into the Egyptian national grid under a 25-year agreement with EGPC, development of the WDDM Concession and the Nile Valley Gas Company, which delivers gas to industrial and residential customers in the Upper Egypt franchise area.
Edison International of Italy is a partner of BG in the Rosetta and WDDM Concessions and, together with other local partners, in the gas transportation and distribution business through the Nile Valley Gas Company.
Gaz de France is a state-owned integrated group active in all sectors of the natural gas industry. It operates in exploration, production, trading, transmission, storage, distribution, energy management, air conditioning and heating. — (menareport.com)
© 2002 Mena Report (www.menareport.com)