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Egypt needs higher gas prices, says Britain's BG - Daily News Egypt

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Egypt needs higher gas prices, says Britain's BG

ALEXANDRIA: One of the biggest gas producers operating in Egypt urged the government on Tuesday to raise domestic prices and ease access to higher value markets to attract capital for exploration. Stuart Fysh, regional executive vice president of British gas and oil company BG Group Plc, said that without revenue increases exploration capital could dwindle …


ALEXANDRIA: One of the biggest gas producers operating in Egypt urged the government on Tuesday to raise domestic prices and ease access to higher value markets to attract capital for exploration. Stuart Fysh, regional executive vice president of British gas and oil company BG Group Plc, said that without revenue increases exploration capital could dwindle in the face of rising rig and exploration costs. It will be a challenge for Egypt to compete for exploration capital … Explorers will need to see higher gas prices for their development if they are to continue to risk their money seeking gas here, Fysh said at a conference in Egypt. These price increases can come either by clearly identified access routes to global markets or by increasing domestic gas prices and most probably by a combination of both these measures, he said at the Mediterranean Offshore Conference. Speakers said Egypt is the sixth largest producer of liquefied natural gas (LNG) in the world. It also exports gas through a pipeline which has so far reached Jordan. About 30 percent of Egypt s gas is exported, and conference speakers predicted growth in global demand. The speakers said Egypt s domestic demand was likely to grow by 9 percent a year for the next few years. Fysh said there was capacity for volume growth from existing fields and new fields will come on stream as early as 2007. He added that plans to export Palestinian gas from the fourth quarter of 2009 were on track. BG plans are well advanced with the intention of exporting Palestinian gas from the Gaza Marine field … establishing Egypt as a gas processing hub, he said. Egypt has two LNG plants from which it exports most of its gas. The Damietta plant, in which Union Fenosa and Eni have stakes, has one LNG processing unit or train. The Idku plant, in which BG has a stake, has two trains. About 85 percent of the 12 million tons a year of gas Egypt exports is shipped as LNG, which is gas super-cooled into liquid form. Customers include the United States, Spain and France. Egypt has plans to extend its Jordanian pipeline to Syria, Turkey and Europe. Reuters

Topics: FJP

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