UK-based marine engineering company Subsea 7 has been awarded a major contract as part of the second phase of the $12bn West Nile Delta North Alexandria Concession field development project.
In a statement released on 26 February, Subsea 7 said it had been awarded the deal by UK oil and gas company BP, which operates the concession, and its German partner RWE DEA.
Subsea 7 says the contract is worth in excess of $750m, but has not given an exact value.
The contract scope includes engineering, procurement, installation and pre-commissioning of the subsea infrastructure for 12 wells located in the offshore oil fields Giza, Fayoum, and Raven.
Under the contract, Subsea 7 will oversee the construction of 80 kilometres of umbilicals and 220 kilometres of pipelines.
The contract scope also includes the installation of export lines from the subsea location to the Idku liquefied natural gas (LNG) export terminal.
Subsea 7 is intending to start engineering and project management work immediately. Offshore installation is scheduled to commence in two stages, with the first stage commencing in 2017.
The first stage will involve landfill and laying pipes in shallow water. The second phase is due to commence in 2018 and will involve installing deepwater pipelines as well as subsea umbilicals, risers, and flowline (Surf) installation.
Subsea 7 says its vessels Seven Borealis and Seven Antares will be used for the pipelay, while the heavy construction vessel, Normand Oceanic, will be used for the other construction activities.
The West Nile Delta North Alexandria Concession development is Egypts biggest ever oil and gas project. The concession has proven reserves of 5 trillion cubic feet of gas and 55 million barrels of condensate.
The North Alexandria development is expected to produce up to 1 billion cubic feet a day of gas when fully operational. This is equal to about 25 per cent of the countrys current consumption.
The terms for the development of the North Alexandria concession were agreed in 2010, after several years of discussions.
Plans to develop the concession were put on hold in the wake of the 2011 uprising and the new authorities struggled to get the project back on track due to its large debts to international oil companies (IOCs) and the low price paid for domestically produced gas.
After protracted talks, a provisional agreement to restart the development received approval from the State Council in late January 2015, paving the way for the official signing that took place at the March Egypt Economic Development Conference.
The concession is now expected to start producing in 2017.
The additional production could be transformative for Egypts industrial sector, which has suffered in recent years due to an acute shortage of natural gas.