BG Group yesterday held a presentation in London for investors and analysts on BG's growing activities in Egypt. The event was hosted by Frank Chapman, the Chief Executive of the gas group.
BG plans to invest approximately $770 million in Egypt over the next four years with a peak of investment of $250 million in 2002. Between 1997 and 2001 BG invested around $440 million in its Egyptian operations.
Also announced at the presentation: • BG expects that for the next two years supply will exceed demand in the Egyptian gas market. Consistent with BG's planning case, the Rosetta and Scarab Saffron fields are likely to produce at or about the 75% guaranteed offtake level. • Rosetta Phase 2 is likely to be sanctioned around the end of the year, to underpin future production. • BG has negotiated the award of three additional Development Leases over a sizable portion of West Delta Deep Marine area, with formal signature expected shortly. • The shareholders in the Nile Valley Gas Company are undertaking a strategic review of the growth options for the company. • The LNG Export Agreement allows accelerated cost recovery, improving returns for BG and its partners in the West Delta Deep Marine Concession. • The LNG Export Agreement also provides that the LNG facility at Idku will operate within its own Tax Free Zone. • The EPC cost of Egyptian LNG Train 2 is expected to be less than half of the EPC cost of Egyptian LNG Train 1. Egyptian LNG Train 1 sanction is expected this summer with first deliveries scheduled to commence in 2005.
By the end of 2006 BG expects to be the largest Egyptian gas operator with production of over 2 billion cubic feet of gas per day.