After stalling for more than three years due to political instability and security concerns, British-based oil and gas company BP intends to pump US$10 billion into a natural gas project that could meet 25 percent of Egypt’s domestic demand.
According to a statement from Egypt’s cabinet, Prime Minister Ibrahim Mehleb met with BP’s CEO on Tuesday to discuss gas developments in the North Alexandria field, located offshore in the Mediterranean.
In July 2010, BP signed an agreement with Egypt’s petroleum ministry to develop the deepwater reserves, which hold an estimated five trillion cubic feet of gas. At the time, it expected gas to come online in late 2014, but work was halted in the aftermath of the 2011 revolution.
In the meantime, Egypt’s demand for natural gas increased while production fell. Earlier this year, officials announced that Egypt would soon be a net importer of the fuel, which is a primary power source for its electricity plants and many of its factories.
The growing gas deficit has left the nation in an energy crisis. Unable to source enough fuel to keep power stations running at capacity, the government has been forced to shut off power, often for hours every day, leaving industry idle and homes and businesses in the dark.
Last month, Oil Minister Sherif Ismail told reporters the project would be restarted, pending discussions with the government in July. Ismail predicted initial production of 450 million cubic feet per day in 2017, rising to 800 million cubic feet per day in 2018, Reuters reported.
Once online, the project should help ease Egypt’s gas shortage, and reduce the need to source expensive imported gas.