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By Shadi Bushra and Ehab Farouk
CAIRO, March 9 (Reuters) - Egypt has priced the shale gas expected from a December deal with foreign firms at $5.45 per million British thermal units (mmBtu), an official at the oil ministry said on Monday.
Egypt signed its first contract to extract gas by hydraulic fracturing, or fracking, in a deal with Apache and Shell Egypt that includes investments of $30-$40 million, the oil ministry said at the time.
A recently updated pricing policy has pushed companies’ earnings on some offshore gas developments to $6 per mmBtu, from a previous cap of $2.65, in a bid to lure investment back to the sector
A Shell spokesman declined to confirm the price, but said: “(State oil company) EGPC has agreed a higher gas price for the Apollonia pilot project to reflect the increased cost of developing technically challenging hydrocarbon reserves.”
Under the contract, three horizontal wells as deep as 14,000 feet in Western Sahara fields will be drilled.
“The shale gas agreement is at an experimental stage for a year while we make sure the search for shale gas is feasible,” the oil ministry source said.
Egypt aims to boost domestic production and foreign imports of oil and gas to help address persistent energy shortages. (editing by Jason Neely and William Hardy)