Foreign Partners Gas Prices To Be Adjusted According To Economic Cost: Minister

Gas price adjustments for foreign partners with newly discovered fields are underway, and the prices will reflect the economics of each project based on whether production takes place on surface layers or deep layers said Minister of Petroleum and Mineral Resources Sharif Ismail in a statement to the Daily News Egypt.

Whether foreign partners intend to build treatment plants will also be a factor in determining prices, he added.

He pointed out that this will lead to an increase in investments from global companies, more research activities and exploration operations. The process will also serve to speed up the development of recently discovered deep water gas fields, boost gas production rates, and raise gas supplies to economic development projects in Egypt.

The price of gas produced will be agreed on for each project separately. The agreement will be sent to the cabinet for approval, then to parliament in order for a new law to be passed for the agreed upon price and the agreement to be properly amended, according to Ismail.

The Ministry of Petroleum reached a tentative agreement to adjust gas prices listed in the articles of the petroleum agreement with Germany’s RWE in its concession area in the Nile Delta. The cabinet issued its approval, and the agreement is now set to be sent to legislators.

It should also be noted that the price of gas obtained by the government from foreign partners has remained at $2.65 per million BTUs for 14 years, excepting deep water projects.

An Algerian delegation will visit Egypt in the coming days in order to negotiate with the Ministry of Petroleum regarding the provision of additional shipments of liquefied natural gas required by power plants, said Ismail.

“The state will provide the financial allocations necessary to import gas for electricity generation during the summer through any possible means, and we hope for it to arrive in September,” said Ismail.

The Ministry of Petroleum reached an agreement to import 12 shipments of liquefied natural gas that are scheduled to begin arriving in September. In August, a vessel will arrive to convert the imported liquefied natural gas to its gaseous form, said Ismail.

Source: Daily News Egypt