Eng. Mohamoud Latif chairman of EGAS denied formally the information that has been published in one of the private newspapers about the gas price for fertilizers project in Damietta (Agrium), and asserted on the inaccuracy of the information concerning the Agrium gas price as the gas pricing for Damietta Fertilizers Factory is influenced by both Urea and Ammonia international price. Thus, if the current Urea price is around $ 450/ton, the gas price will reach $4.25/million BTU. Also, if the current international Ammonia price is 575$/Ton, the factory gas price will be around 5.4 $/million BTU. Taking into consideration the additional costs of liquefying, transportation, taxes and transformation into the gaseous state, the price for fertilizers factory will be equal to the liquefied natural gas exportation prices in the international markets. Beside the revenue gas selling price of the project, there is also an additional revenue from the Egyptian contribution in the project reaching 33% which will be around 1.5$/ million BTU considering that Egypt's revenue from the gas selling price for the fertilizers' factory can reach around 5.8 $/million BTU of Urea and 7$/ million BTU of Ammonia. Eng. Mahmoud Latif added that pricing gas equation for the fertilizers' factory (Agrium) is the same pricing equation applied in the factory of Miser Oil Processing and Fertilizers Company (MOPCO) in Damietta. The equation was escalated to the Supreme Council for Energy and the Council of Ministers then it was approved as it represents the best applicable method for gas pricing taking into consideration that the equation allows increasing in the gas price which is connected to the final product price (Urea/Ammonia) and without a maximum limit.
Eng. Latif added that the published information stating that the Egyptian Gas costs are 2.65$/million BTU is incorrect as it is much more less than that, taking into consideration that this amount is paid to the Foreign partner to buy his quota of natural gas while the cost of Egypt's quota from natural gas is limited to transportation, distribution and the different taxes.
Eng. Mahoud Latif clarified that the daily contracted amount of gas for the project is 140 million CF/day not as the published information 120 million CF/day, as there is a big difference reaching doubling 35 between the measuring unites the thing that is supposed to urge the writer to be much more precise in writing such technical issues.
Regarding the untrue published information stating that Agrium Egypt Company will sell Urea Fertilizers to the International Agrium there are international indicators that control both Urea and Ammonia prices, taking into consideration that the Egyptian party has the right to revise selling and exporting prices and the credibility of the international companies working in Egypt in dealing with the international institutes and banks. In addition to these rules, the published information in one of the private newspapers is considered fraud which is an impossible attitude for such international companies to adopt.
He also mentioned that the petroleum sector took the initiation and had a long course in modifying and revising the exporting prices in the signed contracts, thus the estimated amount after this modification is an additional 18 billion during the next 20 years which is not a solely step on the side of Egypt as it is an international issue resulted from the unprecedented dramatic increase in crude oil prices in the international markets. Eng. Latif stated that the petroleum sector is currently implementing the Upper Egypt natural gas pipeline as it reached to Minia city on last January, also there are internal projects for distributing gas in the industrial zones and main cities as it is planned to supply the gas to Assuit and Suhag with the beginnings of the next year and to Aswan with the end of 2009 which indicates that the petroleum sector is working according to a clear agenda giving the maximum priority to meet the Egyptian Governorates needs of gas and to maximize its domestic uses.