The large but long-stalled US $12 billion West Nile Delta (WND) subsea project in Egypt’s Mediterranean deep waters is to be fully revived.
DI hears the UK major BP and its German partner RWE DEA are in the final stages of talks with the state-owned Egyptian Natural Gas Holding (EGAS) over the complete revival of the development of more than 5 Tcf of recoverable gas and associated condensate resources from the North Alexandria and West Mediterranean licences.
With a Final Investment Decision expected before mid-2015, it is understood that BP and RWE will heat up their plans originally made before Egypt’s revolution to sink up to $12 billion in a phased subsea-to-shore development of their largely High Pressure-High Temperature discoveries in the concessions.
DI understands that BP and RWE have committed to initially invest in the fast-track development of five discoveries in North Alexandria, in order to hit a planned gas production capacity of 450 MMcf/d in 2017. A second phase will expand that to 800 MMcf/d by 2018.
The WND development is designated by BP as having ‘Major Project’ status, with plans to eventually ramp up output to more than 1 Bcf/d of gas (25% of Egypt’s current production). Both adjacent concessions lie around 40 km offshore and some 80 km northwest of the city of Alexandria, with the acreage since 2001 producing HPHT discoveries such as Giza, Taurus, Libra, Fayoum, Maadi, Viper, Polaris and Ruby (in the Pliocene), Raven and Taurus Deep in the deeper Miocene formation, and Hodoa in the Oligocene. Water depths range out to beyond 1,100 m (3,609 ft).
The five to be developed initially are understood to be Giza, Fayoum, Raven, Taurus and Libra. The expected development case for the first phase involves 24 subsea wells tied back to shore.
The operator is expected to utilise some of its learnings from its ongoing Project 20K initiative as part of the development, which could place FMC in a strong position for the trees as it is participating with BP in a technology development agreement for Project 20K focused on the design and development of 20,000 psi rated subsea production equipment, including subsea production trees and a subsea High Integrity Pressure Protection System.
The North Alexandria and West Mediterranean concessions have been the subject of ongoing talks between BP, RWE and EGAS over the past year focused on commercial terms and conditions. North Alexandria has always been the mainstay of the project, with development and production-related work in the concession estimated to need between $9-10 billion of capital expenditure, with West Mediterranean requiring the other $2 billion. Originally both were planned to be brought onstream by the end of 2014, before the 2011 revolution stopped all activity in its tracks.
With Egypt needing to fix its short and long-term strategic gas supplies as it continues its massive rebuilding process, including deals it has also done to receive gas from future deepwater projects offshore Israel such as Noble Energy’s Leviathan field (also currently the subject of some doubt, see separate story page 2), progress in the latter part of last year was surprisingly swift in order to resolve the issues and get an acceptable gas price agreed.
- BP also in November committed to spend $240 million exploring two new exploration blocks won in Egypt’s 2013 EGAS licensing round, including Block 8 (Karawan Offshore) in the country’s northeastern waters. BP will have a 50% stake in the block, operated by Eni with the other 50%. Activity there will include shooting 3-D seismic and drilling three exploration wells.
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