FEED Contract Awarded for Egyptian LNG

BG Group plc, Edison International S.p.A., and the Egyptian General Petroleum Corporation have announced 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 kilometers 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.