BG Egypt upgrades gas infrastructure

31 August 2014

West Delta Deep Marine control system upgraded as wells are brought online

The Egyptian subsidiary of UK oil and gas company BG Group has upgraded the well control system for its offshore West Delta Deep Marine concession.

The upgrade cost $1.5bn, according to BG Egypt president Arshad Sufi.

“This has enabled us to safely start up new wells while keeping existing ones producing,” he said.

The investment will be welcomed by the Egyptian government, which is currently struggling to find solutions to a crippling natural gas shortage.

Rising domestic demand and declining production has led to feedstock being diverted away from liquefied natural gas (LNG) facilities, including those of BG Group.

In July, BG Group announced that it is unlikely to export another cargo of LNG from Egypt during 2014 due to the gas shortage.

It also announced that it had seen a 52 per cent drop in hydrocarbon production between the second quarter of 2013 and the second quarter of 2014.

The crisis has led to Egypt failing to deliver on money owed to international energy companies. At the end of June, the Egyptian government owed $1.5bn to BG Group, something that has made the company reluctant to invest in its Egyptian assets.

In a statement released on 31 July, BG Group said, “In the absence of concerted action from the Egyptian government, the future commercial operation of Egyptian LNG remains at risk.”

The ongoing field development project at the West Delta Deep Marine (WDDM) concession is called Phase 9a. Its scope includes:

  • The drilling, completion, hook-up and commissioning of nine wells
  • Rigid flow lines
  • Flexible flow lines
  • Infield control system umbilicals
  • Two new main power distribution cables
  • Associated significant topside controls system modification
  • Subsea structures

The client for the project is WDDM Partners, which is 50 per cent owned by BG Group and 50 per cent owned by Malaysian oil and gas company Petronas.

Phase 9a is being undertaken by Burullus Gas Company, whose stakeholders are the state-owned Egyptian General Petroleum Corporation (EGPC), BG and Petronas. EGPC owns 50 per cent of Burullus Gas Company while BG and Petronas own 25 per cent each.

The contract for engineering, procurement, fabrication, installation and commissioning (EPIC) of the subsea infrastructure was awarded to Saipem.

The scope for the subsea infrastructure contract includes:

  • Flow lines
  • Umbilicals
  • Structures

GE supplied subsea control equipment and One Subsea supplied production tree equipment.

Drilling operations were undertaken by Saipem, Diamond and Transocean. Saipem is currently completing the pre-drilled wells.

The West Delta Deep Marine concession was awarded to BG Egypt in 1995.

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