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EGYPT - Badreddin Fields.

Bapetco is a 50-50 JV of EGPC and Shell. Its first Badreddin field, BED-1 discovered onshore in 1982, is an oil producer (see OMT). Two gas-rich fields, BED-2 and BED-3, were found in 1987/88. BED-3 went on stream in mid-1990 at an initial rate of 100 MCF/d and cost over $370m to develop - including a gas processing plant and a pipeline. Its output rose to 125 MCF/d & 12,000 b/d of condensate by end-1990, reaching a 165 MCF/d target in mid-1992. BED-2 went on stream in mid-1992. Shell developed Sitra (1987) and other Sitra units (1992/93) and brought them on stream in June 1993. The output from all these fields rose to 350 MCF/d. Bapetco's proven reserves in that area are more than 150m barrels of oil and 2 TCF of gas. (The 660 BCF BED-2 lies in Upper Cenomanian sandstone at depths below 2,200 metres. The 1 TCF BED-3 is 20 km east/SE of BED-2). In 1988, Shell had a major gas find in the north between the Qattara Depression and Lake Qarun. Since then it has built a pipeline linking its gas to the national distribution grid. The gas is sold under a "take-or-pay" contract with EGPC. Most of the gas is pumped through a 270-km pipeline to the Ameriya petrochemical complex west of Alexandria.

Obayed, one of Shell's giants found in Sept. 1992 on Bapetco's Obayed block, went on stream in Sept. 1999 with a capacity of 300 MCF/d and 45,000 b/d of condensates. Described as the second largest gas field in Egypt next to Abu Madi, it is north of the desert 10 km west of Marsa Matruh and along the Mediterranean coast. Its recoverable reserve was first put at 1.4 TCF. EGPC officials say it could be as large as 9 TCF, thanks to further discoveries in that area made by Shell since late 1992. The field lies in Jurassic Ras Qattara and Khatatba sands, gas-rich Fms which have aroused the interest of all WD operators. The gas is supplied to EGPC's national grid, under a 25-year take-or-pay contract signed on Sept. 26, 1996, through a 34-inch, 315 km pipeline built to Ameriya, near Alexandria. This pipeline is shared by Khalda (KPC) but run by Shell. The system includes a 12-inch, 55-km condensates pipeline from Obayed to Meleiha, loading and reception terminals, and crude oil and condensate storage facilities and pumping stations at Meleiha. Shell has invested $657m in development of Obayed. This has included 21 wells, a gathering network and various facilities. The front-end engineering designs were made by ABB Lummus Global. The $170m main contract was awarded in May 1997 to Brown & Root.

In Bapetco's Matruh block, adjacent to Obayed, Shell had discovered a large gas field in Sept. 1991. The first discovery well tested 22 MCF/d of gas and 2,200 b/d of condensate at a depth of 4,970 metres. Further discoveries there were relatively small but the whole area seemed promising to Shell. As a result, Shell has since got more blocks in the Western Desert, including one close to Matruh and two further south, which are not far from its pipeline. It got North Mediterranean Deep Marine, where in 1999 it began a $210m first exploration programme and said the block would be for a project to export gas by pipeline or in LNG form.

Shell acquired the Matruh and Obayed blocks in 1989 and began drilling in both tracts in 1991. On Feb. 2, 1993, Shell and EGPC signed an accord to apply a better pricing system for the gas purchased by the state firm. This encouraged Shell to embark on a massive development of the Obayed and Matruh fields. Shell has invested over $3.5 bn in Egyptian E&P since 1979. Among other concessions in Egypt, Shell has an interest in the Rosetta block, off the Nile Delta, in which the operator is BG (see above).

Shell's other blocks in Egypt include the 901 sq km North West Damietta tract offshore in the Nile Delta area, which it is exploring through three wells at the set cost of $19m, and the 196 sq km North Rahmi acreage in the Gulf of Suez where in 1998 it agreed to spend $22m.

Shell has been negotiating with EGPC for a 25-year franchise to market gas in the El Fayyum and Ismailia regions. An agreement on this was expected in January 2000. The franchise will be held in partnership with the private Egyptian company Arabian International Construction.

Abu Al Gharadiq of GUPCO, discovered onshore in 1972 by Amoco, is the second largest gas producing field in the Western Desert. It also produces oil (see OMT). The field has two gas processing plants with a total capacity of 7.2 MCM. GUPCO says, the Abu Al Gharadiq Basin might contain 45 TCF of gas, including 25 TCF in the Cretaceous. Another GUPCO study suggests that the Matruh, Alamein and Faghur regions, north of Abu Al Gharadiq, could have potential reserves of up to 90 TCF.

Khalda Petroleum Co. (KPC), a joint venture held 50% by EGPC, 25% by Repsol/ YPF (operator), 20% by Apache and 5% by Novus Petroleum of Australia (which in 1998 bought the equity from Samsung of S. Korea), is an oil producer (see OMT) and its Khalda block lies to the south of Obayed. KPC has important gas fields which went on stream in Sept. 1999 and are shortly to produce close to its target of 250 MCF/d and about 16,000 b/d of condensates.

The gas and associated gas fields - Khalda, Salam, Salam S-E, Tareq, Hayat, Safir, Tut, Yasser, Shuruq, Shuruq East and others, as well as Ras Kanayes, Umbaraka and South Umbaraka which are in three different blocks operated by Repsol (see below) - were discovered in the past eight years. They include one KPC field found in late 1994 in the Jurassic Ras Qattara sandstone and Khatatba sands similar to Shell's Obayed Fm to the north. The Khalda block is south of Marsa Matruh.

Apart from its stream to Ameriya which began in Sept. 1999, KPC already produced 20m t/y of gas and condensates from Khalda, Salam, Shuruq, Tareq and other fields in recent years. Repsol has tested Jurassic formations. Since 1994, Repsol has made impressive discoveries. Most important are the ones found in 1996-1998. Their development has cost about $435m.

About 200 MCF/d of the gas is processed by a new 300 MCF/d gas plant built at the Salam field and sold to EGPC under a 25-year take-or-pay contract signed in December 1996. The gas is pumped through a 34-inch, 315 km pipeline built to Ameriya, near Alexandria. But the gas is consumed in Merghem, a western suburb of Alexandria. Another 50 MCF/d of the KPC-delivered gas is processed at a new plant in Tareq field and, under a separate take-or-pay contract with EGPC signed in Dec. 1996, is consumed in the Greater Cairo area through the national grid. This, too, is pumped through the 315-km pipeline to Ameriya, which is shared and run by Shell (see above).

Salam, Tareq and the others, as well as fields in the Ras Kanayes, Umbaraka and South Umbaraka blocks (see below), are being developed further, together with the new discoveries, so that Repsol's total non-oil production stream reaches more than 350 MCF/d and over 40,000 b/d of condensate by 2002. Samsung Engineering Co., which in June 1997 had the main $207m contract for the fields' development and gas gathering system, is hoping to win the new project as its group used to be a partner in KPC until 1998.

Ras Kanayes field, in an onshore Ras Kanayes block east of Marsa Matruh, went on stream to join the KPC production system in 1999. This block is held by EGPC, Repsol (operator which took Norsk Hydro's stake in early 1997) and Kuwait's KUFPEC. The JV also holds the nearby Ras El Hikma block. Its development has included a pipeline linking the field to the Khalda system. The block has a dozen oil and gas bearing structures. Within nine years of work, the previous operator Norsk Hydro had made three important gas/condensate discoveries. One find, JB 27-2, was announced in Oct. 1992. The well tested 19 MCF/d of gas and 1,800 b/d of condensate in a 40-ft thick zone in the Jurassic, at a depth of 14,000 ft. In early 1993 Norsk Hydro put the structure's "recoverable 8.8 BCM of gas and 5.5 MCM of condensate". Another discovery well, JA 27-2, yielded more than 18 MCF/d of gas and 1,280 b/d of 50 deg. API condensate from a similar formation. The third discovery was announced in early 1993 by Norsk Hydro which said it yielded 600,000 CM/d of gas and 1,750 b/d of condensates.

Umbaraka & South Umbaraka blocks, close to Salam, are held by the Western Desert Petroleum Co. (WEPCO), a JV of EGPC and Repsol (which in 1998 got the equity of Phillips and became operator). WEPCO was the first in the WD to find gas at Abu Qir (see above). The two blocks have two Umbaraka gas fields which Phillips found in the late 1970s and did not develop. The first Umbaraka field, discovered in 1976, extends to South Umbaraka in the adjacent block of the same name which is close to Salam and other KPC fields. Repsol has developed them and linked them to its KPC production system at Salam.

The Khalda Offset block, with Repsol as operator, also contains gas which the Spanish major is to develop and link to the KPC system. Repsol has found gas in the Alamein region and in 1999 launched a programme to drill 10 new wells on the Khalda and Khalda offset blocks. It is also exploring a block in East Bahariya and north-east of Abu Al Gharadiq.

KPC is to build its own 190-km gas pipeline from Salam to an existing trunkline in the south, called Southern Gas Pipeline, running east from Abu Sinan gas field to the Dahshour industrial zone of Greater Cairo. But part of its gas will continue to be pumped to Ameriya through Bapetco's pipeline. EGPC has just built a plant at Ameriya to process 550 MCF/d of WD gas for the production of 475,000 t/d of ethane/propane mix for a new petrochemical venture, 600 t/d of LPG and 1,200 b/d of condensates.

Repsol/YPF has been negotiating with EGPC for a 25-year franchise agreement to market gas in Greater Cairo's industrial zone called 6th October City, in the south-west of the capital adjacent to Dahshour.

Kanayes onshore block east of Marsa Matruh is held by Agip's IEOC and EGPC. IEOC has made important gas discoveries there, which are only about 15 km east of KPC's Tareq, i.e., close to existing facilities.
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Publication:APS Review Gas Market Trends
Article Type:Brief Article
Geographic Code:7EGYP
Date:Jan 10, 2000
Previous Article:EGYPT - Burullus Gas Co.
Next Article:EGYPT - Integrated Gas Strategy; Exports Won't Exceed 25% Of Output.

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