A team from the Kuwait Fund for Arab Economic Development visited Cairo at the end of January to evaluate technical and financial proposals for the El-Arish-Aqaba pipeline. The fund is expected to initial a $100 million loan agreement with the client, locally-based Al-Sharq Gas Company. Kuwait-based Arab Fund for Social & Economic Development will provide an additional $50 million towards the total $220 million cost of the gas pipeline, while the government has allocated $70 million for the project.
Under an agreement signed with the Jordanian government in June, Al-Sharq will deliver 1,000 million cubic metres a year (cm/y) of gas to Jordan from the beginning of 2003. Construction is already under way on a 258-kilometre, 36-inch pipeline from a pumping station at El-Arish to the Gulf of Aqaba. An 18-kilometre subsea line will connect the pipeline to the terminal in Aqaba port, where the Egyptian gas will be conveyed to power stations through a planned transmission network (MEED 23:11:01).
A syndicate of five local banks, led by Amman-based Arab Bank Group, has agreed to provide the Jordanian government with a $65 million guarantee to support the supply agreement. Under the terms of the agreement, the National Bank of Egyptwill issue a matching guarantee, which will expire on first delivery of gas in January 2003.