Cairo, April 18: British Gas and Egypt signed a deal on Saturday calling for at least $220 million in investment to develop the gas market in upper Egypt.British prime minister Tony Blair, in Cairo on a Middle East tour, witnessed the signing. He earlier said he hoped British and Egyptian economic ties would continue to develop.``I am very serious about making sure that we carry on cooperating, and I want to see relations between Britain and Egypt even stronger,'' Blair told Egyptian television before British Gas (BG) chief executive David Varney signed the deal with Egyptian General Petroleum Corporation chairman Abdel Ayad.
``British Gas is going with Egyptian partners to help build the new gas pipeline into upper Egypt and that's going to be extremely important for people here,'' Blair said. ``Egypt has made a lot of economic changes here that have been very beneficial,'' he said.
Egypt has pursued International Monetary Fund-backed reforms of privatisation and economic liberalisation since1996.
A BG statement said privatisation and liberalisation have created new opportunities and that the deal was a prime example of how the company can win new business in overseas markets.
``Egypt is an important area for investment by British Gas and one where the company's skills and experience throughout the `gas chain' from exploration to distribution make it a valuable partner,'' another BG statement quoted Varney as saying.
The 25-year franchise deal involves extending Egypt's gas transmission and distribution system in two phases worth $220 million invest-ment.
The first would extend the gas network to supply over 20,000 consumers in Beni Suef and the second would extend it 270 km (170 miles) from Beni Suef to Assiut. Further phases would extend it to Qena and Aswan.
British Gas will be the lead participant in a new company it is forming with its partners to develop the gas market and infrastructure, the Nile Valley Gas Company (NVGC).
British Gas Plc will hold 37.5 per cent of NVGC throughBritish Gas Netherlands BV. Edison International SpA, a subsidiary of Edison SpA, the Italian energy holding company of the Montedison Group, will also hold 37.5 per cent.
Orascom for Investment and Development SAE will have a 20 per cent interest and the privately owned Egyptian investment company Middle East Gas Association will have five per cent.
BG executive director exploration and production FrankChapman told Reuters EGPC would buy and sell all of the gas and that it was also focusing on its five concessions in Egypt.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
