The 21 January heads of terms agreement was signed between GdF and Egyptian LNG (ELNG), made up of BG Group , Edison International of Italy, the Egyptian Natural Gas Holding Company (EGAS)and the Egyptian General Petroleum Corporation. The French company has agreed to purchase the entire output of 3.6 million tonnes a year (t/y) from the estimated $900 million first train for 20 years, starting in 2005. GdF will also take a 5 per cent equity stake in ELNG.
Societe Generalis advising ELNG on the financing for the Idku project.
The gas for the Idku plant will come from fields in the prolific West Delta Deep Marine concession, held by BG and Edison. Operator BG has announced the 14th straight drilling success in the concession, whose first field – Scarab/Saffron – is to deliver 533 million cubic feet a day (cf/d) to the national grid from 2003. Volumes will rise by 100 million cf/d once LNG production starts (MEED 30:11:01).
Bechtel of the US is working on the front-end engineering and design (FEED) contract for the ELNG first train. BG says it expects full project sanction to be given in the summer, once the detailed gas sales agreement has been signed and the FEED and planning formalities have been concluded. The plant will use the optimised cascade process developed by Phillips Petroleum Company of the US (MEED 5:10:01).
BG officials say there is sufficient gas available for ELNG to allow the company to forge ahead with the second train. The company has already held talks with US and European parties about taking gas from ELNG, and Chapman has said that there is a good chance that a sales deal from train 2 can be agreed within 12 months. BG expects to be operating more than 2,000 million cf/d of gas by 2007, according to Chapman. Egypt now produces about 3,000 million cf/d and has total proven reserves of 55 trillion cubic feet.
GdF first announced its interest in becoming involved in Egypt at the start of 2001, and has since taken a 20 per cent stake in the North West Damietta block operated by Shell Egypt. The French company says that it has the option to use reserve capacity in future expansion trains at Idku for the liquefaction of natural gas it might itself produce in Egypt.