Front End Engineering and Design (FEED) contract awarded for Egyptian LNG

abarrelfullabarrelfull wrote on 16 May 2012 13:56
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20 September 2001

BG Group plc, Edison International S.p.A., and the Egyptian General Petroleum Corporation have announced today that the Front End Engineering and Design (FEED) contract for the proposed US$900 million Egyptian LNG export project has been placed with Bechtel Inc., of the USA.

The contract, the first major contract to be awarded for the project, is for the engineering and design of the liquefaction plant, storage tanks and marine facilities. The plant, to be located at Idku, 50 kilometres east of Alexandria, will be based on the successful Atlantic LNG project developed by BG Group and other partners in Trinidad & Tobago. The FEED contract is expected to be completed in the first quarter of 2002.

Frank Chapman, Chief Executive, BG Group plc, said: "This contract award is a significant move forward for Egyptian LNG and takes the joint venture partners a step closer in making Egypt's leading liquefied natural gas export scheme a reality. By conclusion of the FEED work, we expect to have in place gas sales agreements for the first train, allowing us to sanction the project. This fast track approach, in parallel with offshore development of our West Delta Deep Marine acreage, keeps us on target for first gas exports in mid-2005."

With the support of the Egyptian Ministry of Petroleum, BG Group, Edison and Egyptian General Petroleum Corporation entered into a fully termed LNG export project agreement based on un-contracted reserves from the partners' West Delta Deep Marine acreage, offshore Egypt. The first train is expected to be 3.6 million tonnes per annum. A joint venture company, Egyptian LNG, will build, own and operate the LNG plant. An Engineering, Procurement and Construction contract for the project will follow completion of the FEED and gas sales agreements and will include significant participation of qualified Egyptian petroleum sector companies

Notes to Editors

BG Group plc has been active in Egypt for over ten years and has achieved a highly successful record in the country via investments in the upstream and downstream sectors.

Significant projects include the offshore Rosetta project, which came onstream in February this year, and delivers gas into the Egyptian national grid under a 25-year agreement with the Egyptian General Petroleum Corporation; the development of the West Delta Deep Marine (WDDM) concession; and the Nile Valley Gas Company which delivers gas to customers in the Upper Egypt region.

The Egyptian General Petroleum Corporation (EGPC) and the recently established Egyptian Natural Gas Holding Company (ENGHC) are the State Corporations that presently implement, plan and oversee policies relating to oil and gas operations in Egypt. EGPC and ENGHC co-ordinate these activities through their participation in companies involved in exploration, production, refining, processing, petrochemicals, distribution and transportation.

Edison International S.p.A., is BG Egypt's partner in the Rosetta and WDDM concessions and, together with other local partners, in the gas transportation and distribution business through the Nile Valley Gas Company. Edison is Italy's leading private energy group.

In the LNG sector, BG Group in co-operation with partners, has established itself as the world's lowest cost LNG manufacturers in the Atlantic LNG plant, Trinidad & Tobago, which produces three million tonnes of LNG per annum for export to markets in Spain, Puerto Rico and the USA. A further two trains are under construction to triple production to over nine million tonnes a year. In addition, the partners have recently agreed and commissioned FEED work for a fourth train.

In Indonesia, BG Group's reserves from exploration interests will supply the proposed Tangguh LNG project, targeting both the traditional markets in Japan, Korea and Taiwan and emerging markets in the region.

In southern Italy, the Group is proposing to construct a US$300 million natural gas importation facility in Brindisi.

BG Group is also playing an important role in the proposed development of a LNG importation terminal in the port of Pipavav, Gujarat State, India.

Earlier this year, BG Group announced that it had signed an agreement with CMS Energy of the USA to take all of the available capacity at CMS Energy's LNG importation terminal in Lake Charles, Louisiana, for a period of 22 years from January 1, 2002.


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