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Egypt: BG suspends linking gas fields to mid-2016 due to outstanding debts

Tuesday, 22 December 2015 14:06

BG has for the second time suspended the connection of stage 9B to the Borollos fields to mid-2016 instead of the initial early 2016 agreed upon, due to Egypt’s late debts payment.

According to a senior official at the Egyptian Ministry of Petroleum, the first suspension had brought about the pushing of the deadline for the connection of 9A to mid-2015.

The official noted that stage 9B is the biggest project to begin production in 2016 and its overall production will be at the highest degree of 500 Mmcf/d of gas but will not boost Egypt’s overall production, as it would counterbalance part of the natural fall of field productivity.

Egypt and BG had decided to increase the price of natural gas produced to stage 9B to $5.88 from $3.95 per million BTUs. The Ministry of Petroleum had previously assured foreign companies that it will pay $500 million of its entire overdue debt which is currently at $2.7 billion, by the end of 2015. But the agreement is yet to be fulfilled.

The official stated that even though Egypt’s overall gas production drops by 100 million feet per month, it is still valued at 4.106 billion cf/d.

Meanwhile, the British Gas Company’s overall production dropped to approx. 850 million cf/d in Q1 of 2015 similar to the 1.1billion cubic feet at the start of 2014, following the connection of stage 9A.

Foreign partners have suspended the joining of their gas fields due to government’s failure to pay overdue debts. This, is however, estimated to lead gas production to drop till the end of 2016, Daily News Egypt reports.

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