A British Petroleum (BP) logo is seen at a petrol station in south London, April 27, 2010.
Egypt is to finalise a deal with British Petroleum to invest $10 billion in gas fields in Alexandria governorate, Petroleum Minister Sherif Ismail said in comments reported by Al-Ahram Arabic news website Thursday.
The fields, discovered by British Petroleum, are estimated to hold 5 trillion cubic feet of gas and produce 1.2 million cubic feet per day, which is equivalent to 20 percent of Egypt's current daily gas production.
At a meeting next week the minister will announce plans to bring forward the date for connecting the new Alexandria gas fields to the national grid to 2017.
On Wednesday, Ismail announced that state-run gas company EGAS had reached an agreement in principle with German firm RWE DEA to modify its current Delta concession contract, the first step by the government to fulfill a pledge to provide more attractive terms to foreign firms needed to boost production, reported Reuters.
The move comes as part of the ministry's plans to start revising gas prices, an arrangement which would only be applied to newly discovered fields.
The move aims to "strike a balance between the parties to the agreement regarding the costs of drilling, development, and production in these areas," said Ismail.
Recently, Egypt announced new discoveries which are expected to increase gas production by 500 million cubic feet per day (mcf/d) to reach 5.2 billion cubic feet per day (bcf/d) by December, announced Ismail last week.
Egypt has suffered an energy crisis in the past three years, most evident in frequent electricity blackouts. Several government officials have attributed the power cuts to a growing fuel subsidies bill and declining gas production.
Consumption of natural gas is projected to increase 12.5 percent to 5.57 billion cubic feet per day in fiscal year 2014/15, compared to the previous FY.