LONDON/CAIRO British oil company BP (BP.L) expects to invest around $12 billion with its partners as part of a finalised West Nile Delta concession deal to develop 5 trillion cubic feet of gas resources and 55 million barrels of condensates.
The supply deal will help Egypt as it tackles its worst energy crisis in decades. Rising energy consumption and decreasing production have turned it from a net energy exporter to a net importer in the last few years and caused persistent blackouts.
BP said on Friday that production from the project was expected to reach up to 1.2 billion cubic feet a day, equivalent to about 25 percent of Egypt's current gas production.
BP said it had about 65 percent equity in the project partnership. Production is expected to start in 2017.
BP North Africa Regional President, Hesham Mekawi said: "BP expects to double its current gas supply to the Egyptian domestic market during this decade when the WND (West Nile Delta) project reaches its peak production."
BP said gas would be produced from two BP-operated offshore concession blocs, North Alexandria and West Mediterranean Deepwater. The firm said it believed there was the potential for future exploration to add a further 5-7 tcf which could boost WND production with additional investments.
BP also said that production from its Taurus and Libra gas fields would be channeled via BG Group’s BG.L existing offshore pipeline network, serving its Burullus concession, into the Egyptian grid.
The head of BG had told Reuters in December that the company was in advanced talks that could boost supplies to power-hungry Egypt by allowing rival BP to use its pipelines.
(Reporting by Kate Holton and Yara Bayoumy; editing by Oleg Vukmanovic and Jane Merriman)