The Egyptian Petroleum Ministry entered intensive negotiations with BP (British Petroleum Compan) to reach an agreement to amend the price of gas in the North Alexandria concession, for the second time in three years, in order to speed up the process of pumping up investments estimated by $8.5 billion to develop the field.

“BP asked for raising the price of gas produced from the field, to about $7 per million Btu, as the current price of $4.5 per million Btu is not suitable nor encouraging, as the field has reserves reach up to 5 trillion cubic feet of gas,” an official source within the ministry said.

“BP believes that the high cost and investments operations with low gas prices in the current agreement would cause the banks to find it difficult to grant credit facilities, giving it no chance to guarantee bigger return in the future,” said the source to Al-Masry Al-Youm.

He added that the British company told the Petroleum Ministry that it won’t be able to start production from the field this year due to the global economic crisis, and the weak financial facilities offered by the banks, pointing that BP asked for extending the deadline till 2014, which the People’s Assembly has agreed on.

The Cabinet previously reached an agreement, back in 2007, with both the Egyptian Natural Gas Holding Company (EGAS) and BP to allow for the first time the raise of the gas price produced from the North Alexandria field from $2.65 to $4.5 per million Btu.