The British Gas Company (BG) has once again postponed linking stage 9B to the Borollos fields to mid-2016 rather than the beginning of 2016, due to delayed repayment of Egyptian debts.
A senior official at the Ministry of Petroleum told Daily News Egypt that BG postponed the project for the second time, when it was agreed in 2013 that the linking will be completed by the beginning of 2015. The first postponement resulted in pushing the deadline for linking 9A to mid-2015.
The official said the total production of stage 9B will be a maximum of 500m cubic feet of gas per day.
The official said stage 9B is the largest project to begin production in 2016, but will not increase Egypt’s total production, as it would offset part of the natural decline of field productivity.
Egypt has recently agreed with BG to raise the price of natural gas produced to stage 9B from $3.95 per million British Thermal Units (BTUs) to $5.88.
The Ministry of Petroleum had earlier promised foreign companies to pay $500m of its total overdue debt, currently at $2.7bn, by the end of 2015. The agreement has yet to be met.
BG’s total production declined to about 850m cubic feet per day during the first quarter of the current fiscal year after linking stage 9A, compared to 1.1bn cubic feet at the beginning of 2014.
Foreign partners in the oil sector have delayed the linking of their gas fields in response to the government’s failure to pay overdue amounts. This is expected to lead gas production to decline until the end of 2016.
The official said total Egyptian gas production is estimated at 4.106bn cubic feet per day, although it is declining by 100m feet every month.