BG Group signs Barca power project agreement

Published May 28th, 2003 - 02:00 GMT

BG Group plc has signed a Memorandum of Undertaking (MoU) with the government of Tunisia in relation to the development of the $250 million Barca Power Project in Sfax, Tunisia. 

 

The proposed 500 megawatts combined-cycle gas turbine (CCGT) Barca power plant would be built adjacent to BG's Hannibal processing site, 21 kilometers south of Sfax. The plant would use up to 120 million standard cubic feet per day of unprocessed gas reserves from BG's offshore interests in the Miskar Concession and, potentially, the Hasdrubal gas/condensate discovery allowing BG to increase its annual gas sales. 

 

Subject to agreeing commercial arrangements and obtaining all necessary authorizations from the Tunisian government, construction of the power plant is scheduled to begin in the second quarter of 2004 with full commercial operation expected in late 2006. 

 

Development of the Barca power plant would facilitate the acceleration of BG's existing Miskar field, where reserves have significantly increased following successful in-fill drilling and reappraisal in 2002. BG is working on a development plan for these reserves, which would result in further investments in the Miskar field. 

 

In addition, BG has confirmed its intention to install a Liquefied Petroleum Gas (LPG) plant at the Hannibal site to supply the Tunisian market. LPG would be bottled and distributed by a local Tunisian company.  

 

BG also confirmed its intention to construct a 67 kilometers condensate pipeline from Hannibal to La Skhira to transport increased condensate from additional gas production from the Hasdrubal field. Engineering work is continuing to define these downstream projects, which are anticipated for commissioning in 2006. 

 

BG has also reached agreement with the Tunisian Government on the renewal of its Ulysse permit, which may contain a southerly extension of the Miskar field as well as other gas prospects, which require further definition.  

 

The renewal of the Ulysse permit includes an extension of 900 square kilometers in an area to the east of the Hasdrubal field. A program of seismic and drilling work has been agreed. 

Martin Houston, Executive Vice President, BG Group plc, said: "An important milestone has been reached with the Government of Tunisia as BG Group seeks to participate in the country's power generation sector.” 

 

“The Barca power project builds on our strategy in Tunisia to create integrated projects between our upstream interests and downstream operations. Our proposed investment in this project confirms our long-term confidence in Tunisia and its energy industry." 

 

BG Group has been active in Tunisia for over ten years and supplies up to 60 percent of the country's current daily gas demand. One of the country's largest foreign investors, BG operates the Miskar gas field, 125 kilometers offshore in the Gulf of Gabes, and holds a 100 percent interest in the Miskar production concession.  

 

Gas is processed at the Hannibal plant and supplied, under a long-term contract, to Société Tunisienne de l'Électricité et du Gaz (STEG), Tunisia's state electricity and gas company. 

With the Entreprise Tunisienne d'Activités Pétrolières (ETAP), BG is involved in two offshore permits - the Amilcar permit and the Ulysse permit, both of which BG operates. The partners have appraised the Hasdrubal gas/condensate field in the Amilcar permit and work is ongoing to define an optimum development plan. 

 

An international invitation to tender for an Engineering, Procurement and Construction contract for Barca Power was issued last summer and negotiations are taking place with a number of contractors. The contract award is expected in early 2004. Up to 600 jobs, mainly for contractors, would be created during the construction phase of the project and up to 50 permanent employees would be required to operate the plant. — (menareport.com)

© 2003 Mena Report (www.menareport.com)


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