The Egyptian General Petroleum Company (EGPC) has entered into a letter of credit (L/C) agreement to ensure it receives deliveries of gas from the giant North Alexandria gas field.

The field is being developed by the UK's BP and Germany's RWE and will provide natural gas to Egyptian homes and businesses.

L/C opening

A revolving L/C has now been opened worth the contractors' share value in the gas, and is due to be renewed every three months.

The revolving L/C is a key stipulation in a 19 February decision made by Egypt's President Abdel Fattah Al-Sisi to amend a contract pertaining to the production of gas from the North Alexandria field.

Tough penalties

The amendments also include fines to be imposed on the contractors in case of delays after a six months grace period starting from the production date.

That clause is designed to ensure the state's right to the gas production and prevent manipulation or delays in BP's and RWE's contractual obligations.

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