Egypt, major liquefied natural gas exporter

Egypt is about to become a major liquefied natural gas exporter with a production estimated to reach some 3,500 million cubic feet a day by the year 2004.

Over the past 15 years, gas production in Egypt has doubled to about 2,700 million cubic feet per day.

The government is now geared to substitute gas for oil as the primary fuel for power stations, which led to a big increase in the domestic use of gas.

In the domestic domain, Egyptian General Petroleum Corporation (EGPC) and an Indian company for fertilizers recently signed a contract on natural gas supplies.

The gas will be used in a new factory to be set up by the Indian company in Southern Suez.

The project will cost $ 475 million and is expected to create new jobs for Egyptians in the industrial zone in Southern Suez.

It is worth noting that Shell Company has signed an agreement with the EGPC to extend natural gas to the Fayoum governorate.

The agreement comes as part of the Petroleum Ministry's plan to extend natural gas Republic-wide.

A press release, issued recently by the company said the agreement gives the Fayoum Company for natural gas, an offshoot of Shell, a permit for 20 years to set up the network of Fayoum through extending and operating lines to houses and plants. Shell will finance the network.

On the same plane, Egypt will establish a holding company to organize activity in its increasingly lucrative natural gas sector, a government official said.

"The Ministry of Petroleum is seeking to separate gas activity from oil and create an economic authority to develop private sector and joint private- public sector investments, in production, transport and distribution of natural gas," Chief Cabinet Secretary, Ahmed Abu Taleb told reporters.

Egypt's proven natural gas reserves stand at around 50 trillion cubic feet and are expected to rise to 110 trillion.

Egypt, Syria, Lebanon and Jordan had signed an agreement in January to build a special liquefied natural gas (LNG) facility in Egypt with an annual capacity of 4.5 billion cubic meters a year.

In a related story, the EGPC has posted a tender announcement on its website for 32 oil and gas exploration blocks, the first large-scale round since 1999.

"There are a variety of blocks on offer, some are relinquishments and some are unexplored ones like the deepwater ones," an EGPC source said.