The Russian gas company NOVATEK and Egyptian Natural Gas Holding Company (EGAS) on Monday signed two memorandums of understanding.

Novatek Board Chairman Leonid Mikhelson told journalists that EGAS had welcomed the Russian company’s participation in the development of Egyptian gas fields and in a tender for concessions.

In his words, this means geological prospecting and subsequent extraction of natural gas in the west of Egypt on the Libyan border and in the Mediterranean offshore areas.

“We plan to consider sites where geological prospecting is possible and sites where we can participate in a tender on our own and together with Egyptian companies,” Mikhelson said.

He said Novatek was putting the main bets on Egyptian gas.

Egypt is one of the first projects of the Russian company, which until recently has worked only inside Russia. It will extract more than 28 billion cubic metres of gas in Russia this year.

It also plans to get involved in projects in the Middle East.

Egyptian Oil Minister Amine Sameh Fahmi said Egyptian-Russian relations in the oil and gas sector “have undergone historical changes and moved from the stage of geological prospecting agreements to strategic cooperation and joint investments.”

In his words, a crucial leap was made when major Russian oil companies had expressed their wish to expand the scope of their operations to include the Middle East and Africa.

According to the minister, the memorandums envisage the creation of joint ventures in the fields of oil and gas development, extraction and sale.

Egypt ranks third in Africa, after Algeria and Nigeria, in terms of prospected natural gas reserves. They are estimated at 1,900 billion cubic metres. Gas extraction in Egypt has doubled lately to 31 billion cubic metres a year.

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