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Egypt alters gas price in deal with German energy giant - ministry
Workers stand near pipes while setting up an oil rig near the coast on the outskirts of Havana May 24, 2010. Cuba estimates it has 20 billion barrels of oil in its part of the Gulf of Mexico, which abuts the oil-rich U.S. and Mexican zones of the gulf, and Havana views its possible production as a godsend. The communist-led island produces about half its energy needs from onshore wells and gets the rest from oil-rich socialist ally Venezuela at favorable prices. REUTERS/Desmond Boylan
CAIRO, Mar 23 (Aswat Masriya) - Egypt's petroleum minister signed an agreement to increase both prices and gas production levels in a deal Egypt previously signed with German energy firm RWE Dea, Egypt's Petroleum Ministry said.
The German company is currently involved in an onshore gas development project in Desouk city in the Nile Delta.
As per today's alterations, Egypt will be buying gas for $3.5 for every million British thermal units, instead of $2.5, the ministry said in a statement.
Minister Sherif Ismail said production will initially rise from 145 million cubic feet (mcf) daily to 210 mcf every day by the summer of 2015.
Production in the second phase will also rise from 210 to 300 mcf daily before the summer of 2016, the minister added.
RWE Dea produced first gas from the Desouk project in September 2013.
RWE Dea is the operator of the project, with the state's Egyptian Natural Gas Holding Company (EGAS) as its state partner.
The German giant alluded to a potential production increase last December, saying, "for 2015, the company expects further production increases from Desouk up to the capacity of approximately 200 million standard cubic feet gas per day."
Egypt has been facing an energy crisis for years, with power outages surging in the summer.
Egyptian authorities have often owed the power crisis to a larger fuel crisis and have been taking measures in recent months to diversify sources of energy.
