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Business Today
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GAS AND POWER
Gas Distribution
In early 2001, Shell entered the Egyptian gas distribution market, investing in two new local gas distribution companies (LDCs).
Shell Gas B.V. took an 18% stake in National Gas Company, NATGAS, in January 2001, through an Acquisition Agreement signed between Shell International Gas Ltd and Egypt Kuwait Holding Company (EK Holding). NATGAS, an Egyptian Joint Stock company, has been awarded a 20-year concession to study, finance, design, build, operate and manage natural gas transportation and distribution network. It will also market natural gas to residential, commercial and industrial customers, on behalf of the Egyptian General Petroleum Corporation (EGPC), in key areas throughout Egypt, mainly around Giza, Cairo & Alexandria. On October 21st, 2001 NATGAS started delivering natural gas to the 6th of October City in Giza province.
Currently, Natgas has connected about 120,000 domestic and more than 50 industrial customers (May 2002). This number is planned to increase during next two years to reach 280,000 domestic and 200industrial customers.
In February 2001, the Royal Dutch/Shell Group of Companies (Shell) finalized a 20-year Concession Agreement with the Egyptian Natural Gas Holding Company (EGAS) allowing
Fayum Gas Company, a Shell Gas B.V. subsidiary, to deliver natural gas to industrial, commercial and residential customers in Fayum Governorate in Egypt, on behalf of EGAS.
Fayum Gas is authorized to design, finance, procure, build, operate and maintain the natural gas distribution systems of the Governorate of Fayum. It is also responsible for all marketing and sales activities, including meter reading , invoicing and collection, with a particular emphasis on the industrial sector.
Fayum Gas is committed to participating in the sustainable development of the Governorate of Fayum, pursuing the highest of Health, Safety and Environmental goals and applying international standards in all its activities. The delivery of first gas, ahead of schedule to Kom Aushim in April and to Fayum City in May, was celebrated at a ministerial inauguration in July 2002.
By 2003 year end, 25,000 residential customers and 60 industrial and commercial establishments in Fayum will be converted to use Natural Gas, thus Fayum Gas becomes the first and only Local Gas Distribution Company (LDC) in Egypt to fulfil it’s contractual obligations to the Egyptian Government’s Gas Holding Company (EGas) ahead of schedule.
Currently negotiations are under way between Fayum Gas and EGas to finalise the terms of Phase 2 of the concession agreement to connect a further 58,000 residential customers in Fayum City as well as other towns of Fayum Governorate. At the same time, a new gas pipeline is under construction to connect a new industrial area and a major additional industrial customer on Qarun lake, planned to be converted to Gas by Q1,2004. In addition, early 2004 will see the connection of the first Compressed Natural Gas (CNG) refuelling station for cars in Fayum city.
Further plans of Fayum Gas include the conversion of heavily polluting brick kilns to cleaner and more efficient natural gas, contributing significantly to a cleaner environment as well.
Shell Compressed Natural Gas Egypt
With Shell’s ongoing commitment towards the environment, a protocol was signed between Shell Gas & Power and the Egyptian Government to establish a company for providing the vehicles with compressed natural gas and compete in this strategic business. The project is environmentally friendly and uses an existing indigenous resource, which will help in increasing Shell’s presence in the gas sector and lead to an improved growth pattern.
The new company will build on its mother company’s strong competitive advantage represented in the incorporation of the CNG business on Shell retail network & it will also benefit from Shell’s access to the Natural Gas Local Distribution Companies, including NatGas & Fayum Gas.
Investments during the initial phase of operation are estimated to be more than L.E. 160m. In addition, upon completion of this phase this business is expected to create more than 300 jobs.
In 2003, the company opened its first conversion centre and first CNG fuelling station in Egypt.
Renewable Energy
At Shell we are contributing to Shell International’s drive to develop opportunities and technologies in renewable energy worldwide, and have identified opportunities in both wind and solar power in Egypt.
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