British Petroleum (BP) started to prepare the land allocated to establish a natural gas processing plant in Rosetta (Rashid) city, with a capacity ranging from 600m to 700m cubic feet per day.
A senior official from the Egyptian Natural Gas Holding Company (EGAS) told Daily News Egypt that BP will complete the production facilities of the plant by the end of 2020. However, the convention stipulates that the gas production from the project would be ready by January 2020 and produce 1bn cubic feet per day for five years.
Article 10 of the convention states: in the case that the contractor fails to complete the project by the set deadline, a six-month grace period would be allowed. After that, a penalty mechanism will be applied if there are no compelling circumstances preventing the contractor from completing the project.
The official said the convention includes the expected plan for producing natural gas in the project during the coming years, starting from July 2017.
He pointed out that the convention stipulates the project will have a trial period from 1 July 2017 until 30 September 2017, with a daily average of 200m cubic feet of gas. It will be linked to the natural gas processing plant of Borollos, affiliated to BP.
He added that the company will increase the production to about 400m cubic feet per day starting from October 2017 until December 2018, while raising production rates to 550m cubic feet in January 2019 until the end of the year.
He noted that the production rates of the north Alexandria project will decline to 900m cubic feet per day by January 2025 until the end of June 2026.
The convention stipulates that the agreed amount of gas can be amended in agreement between EGAS and the representative contractor of BP and RWE.
The project’s convention will enforce penalties on the foreign partner in if it fails to complete the project by the agreed deadline, with a six-month grace period starting from the date of production.
In addition, EGAS is obliged to open a revolving letter of credit at one of the national banks with the value of the partner’s share to guarantee financial dues.