Low prices paid for gas supplied to the domestic market are partly the result of Egypt’s exploration history. Egypt introduced crude-linked prices for gas in 1994 in a (successful) bid to spur exploration: paying Suez Blend crude less 15% (energy equivalent basis).
This heralded an exploration ‘golden age’ which saw the country’s gas reserves soar from 14tcf in 1991 to 57tcf 10 years later. Indeed, production capacity rose to the extent that demand failed to catch up and much capacity was left underutilized – companies struggled to get EGPC to accept the minimum stipulated 75% ‘take or pay’ volumes. (CONTINUED - 466 WORDS)