Egypt has agreed to pay Germany-based DEA 40 percent more for the natural gas it extracts in the Nile Delta Desouk region, the oil ministry said on Monday.
The agreement marks the latest move by Egyptian authorities to improve terms for foreign oil and gas firms in the hope that more competitive pricing will encourage investment in the energy-hungry country.
"Under the agreement, the price of new gas will be raised from $2.50 for every million British thermal units (mmBtu) to $3.50," the ministry said in a statement.
It also said that DEA would increase average natural gas production in the Desouk development to 210 million cubic feet (mcf) per day by this summer, from current rates of 145 mcf.
Average production would then rise to 300 mcf per day by the summer of 2016, the statement said.
Egypt was once an energy exporter but declining oil and gas production and increasing consumption has forced the government to divert energy supplies to the domestic market.
The government has sought in recent months to increase what it pays foreign firms for gas in the domestic market, to encourage them to raise exploration and production.
The oil minister told Reuters this month that Egypt had agreed to raise the prices it pays Edison and BP .
Egypt is also close to a deal with BG to raise the price of natural gas to about $5.88 per mmBtu of gas produced from the West Delta Deep Water concession, from $3.95 before, oil minister Sherif Ismail has said.
