The Egyptian General Petroleum Corporation (EGPC) pays about $4 per million thermal British units (BTUs) bought from Eni’s share in the Zohr gas field in the Mediterranean Sea, according to the price equation linked to oil prices on world markets.
A source at the EGPC told Daily News Egypt that the decline of Brent oil price to $54 a barrel reduced the value of the foreign partner’s share in the gas produced from the field and bought by Egypt.
He explained that the price of gas produced from the field is linked to a price equation of minimum $4 per million BTUs and a maximum of $5.88 per million BTUs when Brent price hits $100 per barrel.
According to the source, the agreement is to pump the entire production of the field to the local market, but in the event of decreased domestic consumption, it is possible to allow exports following the approval of the ministry of petroleum.
He also said that the implementation of the sixth natural gas processing plant is expected to take place by the end of this month to bring up the total capacity of the treatment plant to about 2.4bn cubic feet (bncf)of gas per day.
The source pointed out that the development of the second phase of the Zohr gas field will be completed in July 2019 to boost production to about 2.95bncf of gas per day, instead of 2.7bncf estimated in the development plan.
Moreover, he pointed out that the company aims to invest about $4bn in the development of the second phase next year, bringing up total investment to $16bn.
The source confirmed that the ministry of petroleum is seeking to accelerate the completion of the next stages of development, as per the directives from President Abdel Fattah Al-Sisi.
Furthermore, he added that the ministry succeeded in cooperating with the Italian partner to put pressure on the schedule and access gas production reserves to reach 2bncf of gas per day.
Italy’s Eni revealed the Zohr gas field in August 2015 with estimated reserves of 30tn cubic feet of gas, while the daily production volume reached about 2bn cubic feet and is expected to register 3bncf of gas per day by the end of 2019.