BG says Egypt gas talks are ongoing with BP

18 November 2014

Discussions may lead to an increase in gas supplies to domestic market

UK energy company BG Group is in ongoing talks with its rival, fellow UK firm BP, over a potential deal to share infrastructure in Egypt.

“The two companies are currently in an early stage of talks that could see BP using BG Group’s infrastructure to evacuate gas from its fields,” said a spokesperson for BG Group on 17 November.

BG Group says the deal being discussed will potentially boost supplies of natural gas to Egypt’s domestic market, but would not boost liquefied natural gas (LNG) exports from the group’s Idku facility.

Speaking on BG Group’s earnings conference call on 28 October, chief operating officer Sami Iskander said BP and BG Group were looking at working with the Egyptian government to bring more of BP’s discovered gas reserves online.

“That gas will entirely flow into the domestic market and it’s utilising… our infrastructure and gas processing facilities at Idku,” he said.

“This is really our attempt to work with the Egyptian government in order to bring more gas into the system.”

The deal has been made possible due to a recent overhaul of BG Group’s gas infrastructure in Egypt, according to the group’s spokesperson.

BG Group spent $1.5bn on the project, which was completed earlier this year.

Egypt is currently experiencing its worst energy crisis in decades as domestic demand for natural gas outstrips production.

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