BG International Limited, and its partner Edison International SpA, today signed a gas sales agreement with the Egyptian General Petroleum Corporation (EGPC) giving the go-ahead for the largest gas field development in Egypt.

The Scarab/Saffron field, located in the West Delta Deep Marine concession in the Nile Delta, has estimated reserves in excess of four trillion cubic feet of very high quality gas. First gas production is expected in January 2003 and after a short build up the daily contract quantity will be 530 million standard cubic feet of gas per day, over a period of at least 17 years.

This development will be the first to use deepwater technology in Egypt, in depths of up to 700 metres. Field development and operation, commencing with detailed engineering and design studies, will now be undertaken by a joint venture company, formed by EGPC, BG and Edison, to develop and operate the field.

Peter Dranfield, President and General Manager of BG Egypt, said: "Working closely with Edison and EGPC has resulted in the signing of a gas sales agreement just 14 months after drilling the initial discovery well. This sales agreement is largely the consequence of the enlightened energy and gas policies of the Egyptian government.

"The gas will be sold into the rapidly expanding domestic market. BG Egypt is assisting in realising this growth in gas demand through its lead role in the Nile Valley Gas Company (NVGC), responsible for developing the use of gas throughout Upper Egypt which currently has no access to natural gas."

Today's announcement follows the drilling of 11 successful exploration and appraisal wells in the Nile Delta. This includes four in the Scarab/Saffron field and two recent discoveries, Simian-1 and P12/13, also within the West Delta Deep Marine concession. Both domestic and export markets are being considered for these additional discoveries with initiatives underway to evaluate export of gas using LNG.

Notes to Editors:

West Delta Deep Marine: BG International Limited, on behalf of BG Egypt, is the operator of this concession, in a 50:50 partnership with Edison International SpA.

Franchise Agreement: The Nile Valley Gas Company, (NVGC), was formed by BG, and its partners Edison International SpA, Orascom and Middle East Gas Association. NVGC is undertaking the development of the gas market and infrastructure in Upper Egypt under an exclusive 25-year franchise agreement with EGPC. Gas was delivered to its first customer, Beni Suef Cement, in April this year.

Rosetta: BG International Limited is the operator of this concession with 40 per cent interest. Its partners are Shell and Edison International SpA with 40 and 20 per cent respectively. BG and its partners have a gas sales agreement with EGPC to supply gas from Rosetta. EGPC will receive first gas from Rosetta in 2000, and production will rise to 275 mmscfd. The gas will be delivered into the national grid system southeast of Alexandria.