BG Group (operator with 40 per cent) and its partners Shell (40 per cent) and Edison International (20 per cent) have announced that the Rosetta Concession, offshore the Nile Delta, has entered commercial operation, delivering gas into the Egyptian national grid system east of Alexandria.

Frank Chapman, Chief Executive, BG Group plc, said: "BG set out to bring this major gas project to completion in record time. In the final analysis, we have succeeded in exporting the first gas from Rosetta in less than 45 months from the drilling of the first discovery well in this new offshore province.

"This project will play an important role in underpinning security of the country's future gas supply and demonstrates BG's commitment to Egypt through developing its natural gas industry."

Rashid Petroleum Company (Rashpetco), a joint venture operating company formed by the Egyptian General Petroleum Corporation (EGPC), BG Group, Shell and Edison International developed the Rosetta field.

Gas from Rosetta is supplied to EGPC under a 25-year Gas Sales Agreement signed in October 1997. Commercial production commenced on 31 January. Production will rise to 275 million standard cubic feet of gas per day.

The initial stage of the US$330 million Rosetta development consists of six wells tied back to a 'not normally manned' platform with a 66 kilometre gas/condensate pipeline to the onshore terminal, located near Idku 50 kilometres east of Alexandria. Gas is exported by pipeline into the Egyptian gas grid, and condensate is exported by pipeline to a gathering point at Abu Qir, 15 kilometres east of Alexandria.

Today BG Group and its partner Edison International also announced a further significant discovery of hydrocarbons, north of Rosetta in the WDDM Concession (BG operator with 50 per cent, Edison 50 per cent), marking the eleventh consecutive successful well drilled in the Concession since 1998.

The Sapphire-2 appraisal well has confirmed the presence of significant volumes of condensate in the Sapphire accumulation. During drill stem testing the well flowed at 33.2 million standard cubic feet of gas per day and 755 barrels of condensate per day. The flow rate was constrained by the testing equipment.

BG has had 16 exploration and appraisal successes over the past four years in the neighbouring Rosetta and West Delta Deep Marine (WDDM) Concessions, both located offshore the Nile Delta.

Notes to Editors

Rosetta: Partners in Rashpetco are BG Group (20 per cent), EGPC (50 per cent), Shell (20 per cent) and Edison International (10 per cent).

West Delta Deep Marine (WDDM): In August 1999, BG Group and its partner Edison signed a Gas Sales Agreement with EGPC. This triggered the development of the Scarab/Saffron field in the WDDM Concession. The Scarab/Saffron field is the first gas field development in deepwater off the Nile Delta and is the largest gas field development in Egypt.

In July 2000, BG Group announced the drilling of two successful appraisal wells in the WDDM Concession in Egypt. The wells, Simian-2 and Simian-3, were drilled to appraise the Simian field discovered in 1999. In addition to the results from Simian-1, 2 and 3, there have been three further gas discoveries: P12/13, Sienna-1 and Sapphire -1 in the Concession.

BG Group, the international exploration and gas supply business, has been active in Egypt since 1989 and, having achieved major growth and diversification, has significant activities throughout the gas business. These include developing the Rosetta and Scarab/Saffron gas fields, and developing the gas market and pipeline infrastructure in Upper Egypt.