ENI Inks Deal with Egypt for 2nd LNG Train in Damietta

Eni announces that its Egyptian Affiliate Ieoc Production B.V., BP Egyptian Affiliates, and Egyptian Natural Gas Holding Company (EGAS) have signed at the presence of H.E the Minister of Petroleum Eng. Sameh Fahmy, a Memorandum of Understanding setting the basis for the development of the second Train of the LNG plant located in Damietta (Egypt).

Eni, Bp and EGAS, in light of several major discoveries already made in the Nile Delta region and considering the exploration potential on existing and new acreages will secure enough gas to feed the 5.3 TCF of gas treatment capacity over the period of 20 years for the future Damietta second train. Approximately 1.8 TCF will be Eni equity gas (45,000 boe/d).

The first Train, owned by SEGAS a Spanish Egyptian Gas Company, 80% owned by Union Fenosa Gas, (a Company equally hold by Eni and Union Fenosa) and 10% by EGAS (Egyptian Natural Gas Holding Company) and 10% by EGPC (Egyptian General Petroleum Corporation), started production in December 2004, and has an output capacity of 5 million tons of LNG per year, at present the largest single-train facility in operation worldwide. Eni together with its partners is already supplying gas to the first train from beginning of 2005 and for a period of 20 years.

The second Train expansion will double the LNG production capacity.

The decision taken with this MOU, just few months after start-up of the first train, will allow access to the market with higher quantities of LNG at production costs even lower than the first train.

Egypt is the first Country where Eni expanded its activities abroad. Operations began in 1954 and today the oil company is the Country's major international oil and gas operator. More than 470,000 barrels of hydrocarbons per day (corresponding to about 40% of the Egyptian production) are produced from the Eni fields, of which approximately 200,000 barrels is Eni's equity. In the coming years, Eni's equity production is expected to reach about 240,000 barrels per day.