BG International, through its BG Tunisia business, is to expand substantially its activities in Tunisia following a signing ceremony in Tunis. BG will invest up to an additional US$450 million, over a period of nine years, to develop the Hasdrubal gas condensate discovery, to extend the Miskar gas field development and to undertake further exploration activity in Tunisia.
Hasdrubal contains recoverable sales volumes of approximately 260 billion cubic feet of gas and 25 million barrels of condensate, located 25 kilometres south of the Miskar field in the Amilcar Permit. An appraisal well will be drilled in 2002 to assess the considerable additional reserves potential adjoining Hasdrubal, prior to finalising a development plan.
The Miskar field, which currently supplies over 65 per cent of Tunisia's total daily gas demand will be expanded in several phases, beginning in 2000, over a period of five years. Miskar is presently contracted to produce 168 million standard cubic feet of gas per day (mmscfd). Further development of the field will increase the supply to over 200 mmscfd from 2001. The Tunisian gas and electricity company STEG (Société Tunisienne de l'Eléctricité et du Gaz), is the buyer of the gas. The agreement gives BG the ability to supply over 230 mmscfd on a long-term basis.
The Government of Tunisia, STEG, the Tunisian petroleum company ETAP (Entreprise Tunisienne d'Activités Pétrolières) and BG together signed the series of documents which give the go-ahead for BG to invest further and develop its interests.
David Varney, Chief Executive, BG Group, who attended the signing ceremony on Saturday, said: "BG has entered into a long term relationship with the Tunisian authorities and is committed to supply a substantial segment of Tunisia's gas needs to 2020. We are already the largest investor in the Tunisian energy sector having invested over $600 million in the initial development of the Miskar field. This series of agreements will ensure BG's continued commitment to develop the gas industry in Tunisia, building on BG's expertise throughout the gas chain."
Speaking in Tunisia today, Richard Caborn, UK Minister for Trade, said: "I am impressed by BG's business operations in Tunisia and am heartened by the positive steps that the Tunisian Government has taken to support inward investment. I also hope this encourages additional investment from the UK in the future."
Moncef Ben Abdallah, Tunisian Minister of Industry, said: "We are delighted further to develop our partnership with BG. This commitment indicates the growing attraction of Tunisia for inward investment and underlines opportunities in the rapidly growing gas market. It also strengthens Tunisian-UK links which the Tunisian Government is keen to foster."
In addition, BG is seeking further investment opportunities utilising its gas chain expertise. These could include, in collaboration with STEG and ETAP, gas to power projects and the development of compressed natural gas as a vehicle fuel in Tunisia. Future projects would pave the way for additional investment by BG in Tunisia.
As part of these agreements, and following formal ratification by the Tunisian Parliament, the price for BG gas will be adjusted in line with the 1999 Hydrocarbon Code and will now be indexed to Low Sulphur Fuel Oil instead of High Sulphur Fuel Oil.
In a separate announcement today, BG announced two community projects in Tunisia, sponsored by the BG Foundation, which are aimed at education, the environment and employment.
The first was the unveiling of the first Natural Gas Vehicle (NGV) bus to operate in Tunisia. This vehicle operates exclusively on compressed natural gas and contains a comprehensive computing laboratory. The bus, which has been provided by the BG Foundation, will tour schools providing teaching resources for an environmental awareness programme. It is anticipated that the bus will encourage steps towards building a significant NGV business in Tunisia.
The second initiative created as part of BG's commitment to the community in Tunisia, is named the "BG ADNEN" project and is a partnership between BG and the Tunisian Ministry of Vocational Training. BG will provide funding to allow for thirty 16 to 18 year olds each year to gain vocational training in agriculture, the environment, arboriculture and English. The two-year programme beginning in September 2000 will give students from disadvantaged backgrounds a chance to receive a recognised qualification and gain employment in the growing tourist and environmental sectors in Tunisia.