- Eni will be paid a maximum of $5.88 for every million BTUs
- The deal comes after preliminary agreements were signed in March and June
- Egypt is currently looking to boost domestic production amid a natural gas shortage
Egypt has signed a deal with Italian energy company Eni, agreeing to increase the price paid for natural gas it produces in the country.
[The oil ministry] signed a deal that amended the price for gas with Eni to a maximum $5.88 for every million BTUs and a minimum of $4, based on amounts produced. This is up from $2.65, an anonymous Egyptian Natural Gas Holding Company (Egas) official told Reuters on 5 July.
The deal comes after preliminary agreements were signed in March and June.
In March, Enis CEO Claudio Descalzi, signed a heads of agreement with Egypts Petroleum Minister Sherif Ismail, committing to investing $5bn in Egyptian upstream gas projects over the next four to five years, producing 900 million cubic feet of gas.
This was followed by a $2bn exploration deal that was signed by Eni on 1 June.
A deal has also been signed with Italian energy company Edison, with Egas agreeing to pay a price of $5.88 a million BTUs, up from $2.65, according to the official.
The latest agreements are part of a series of deals made by Egypts state-run energy companies in order to try and boost domestic hydrocarbons production amid an ongoing shortage of natural gas.
In September 2014, the UAEs Dana Gas signed a gas production enhancement agreement (GPEA) with Egas and Egyptian General Petroleum Corporation (EGPC), agreeing to undertake a seven-year development programme that includes 37 new wells and an equivalent number of workovers of existing wells.
In March, the UKs BP signed a $12bn deal to restart Egypts biggest ever gas project, the North Alexandria gas field development.