Energy   Brief of meetings Objectives Related articles from Business Monthly Committee work plan AmCham related member companies Contacts Related Tenders List of Committees | Previous Years

Energy Committee

• BG Egypt: A major player in the natural gas industry
• CNG vehicles: Current practice and future trends in Egypt

BG Egypt: A major player in the natural gas industry - Download Presentation (file size: 3 MB)

AmCham's Petroleum Committee met on February 1 with guest speaker Oscar Prieto, president of BG Egypt, who gave a presentation entitled "BG Egypt: a major player in the natural gas industry," focusing on the petroleum company's operations in Egypt.

One of the largest multinational companies in the field of energy, particularly in the exploration and marketing of natural gas, BG operates in more than 22 countries across five continents. Its cumulative investments in Egypt from 2000 to 2005 topped $5 billion with over $1 billion in expected export revenue. In terms of production, BG Egypt expanded by 98 percent last year and is expected to grow another 50 percent in 2006. It is currently the largest natural gas producer in the country and its production capacity is expected to reach 40 percent of the country's total production by the end of the year.

BG Egypt is the main partner in the Egyptian LNG (Idku) project, a joint venture of EGPC and EGAS together with BG Group, Petronas and Gaz de France, which achieved a record of 2.5 bcfd. The company financed the purchase of two LNG trains worth $1.87 billion, the largest project finance in North Africa, which testifies to international confidence in Egypt.

Having signed two new concessions offshore the Nile Delta (El Burg and El Manzala), BG continues to expand in Egypt. Furthermore, BG Egypt's Rosetta P2 domestic development project, now producing 380 mmscfd, and LNG upstream supply projects (Simian, Sienna and Sapphire), were all delivered ahead of scheduled dates.

BG Egypt successfully drilled 24 of the 28 wells in the Rosetta and WDDM concessions. It also discovered 13 tcf of gas and supplies Egyptian LNG (ELNG) with an excess of 1.1 bscfd. ELNG, which employs 250 Egyptian nationals, liquefies natural gas for export and is expected to produce around 7.2 million tons of LNG annually for 20 years, thus creating trade opportunities in Egypt worth $1 billion per annum.

Top

CNG vehicles: Current practice and future trends in Egypt

On December 19, 2005, AmCham's Environment, Petroleum and Transport committees hosted a joint meeting with Emad Hassan, a principal consultant with NEXANT, and Khaled Abu Bakr, vice chairman and managing director of Gas & Energy Co., to discuss "Compressed natural gas (CNG) vehicles: current practice and future trends in Egypt."

Today, Hassan said, 95 CNG fueling stations service 63,135 vehicles, mostly taxis and microbuses, in 14 governorates. Forty conversion centers turn cars built to run on gasoline into CNG vehicles. Surveys indicate that most owners of converted vehicles are pleased with the results. Those who did not convert their vehicles said they feared poorer acceleration, reduced engine life, safety concerns, the scarcity of CNG refueling stations and cylinder weight. When asked where they had heard of these perceived problems, most said their mechanics had warned them against CNG.

Based on these findings, Hassan identified the main barriers to spreading the technology as: perceived technical and performance problems; the perceived inconvenience of refueling; the cost of conversion; and lack of awareness.

To further the spread of CNG-enabled vehicles, Hassan recommended lowering the import duties on CNG vehicles and the components needed to manufacture them, and a public-awareness campaign aimed at improving CNG vehicles' image.

Abu Bakr said that 90 octane gasoline available for £E 1/liter locally costs an average equivalent of £E 1.64/liter abroad, whereas 80 octane gasoline costs £E 0.90/liter locally and £E 1.57 abroad, a situation maintained by government subsidies that have grown by 352 percent in the past decade as oil prices have increased. These subsidies place a substantial burden on the government and the economy - a burden that could be lightened by removing technical problems as well as refueling and conversion cost barriers.

Top