CAIRO: Civil society groups in Damietta are gearing up for a new campaign against the Canadian company Agrium over a natural gas contract after successfully agitating for the cancellation of their proposed nitrogen plant.
This time around, the issue concerns the continuation of an agreement providing Agrium with natural gas at prices lower than the market and the shifting of the contract between the state and a private gas venture.
The Egyptian Holding Company for Natural Gas (EGAS) has upheld the contract between the Egyptian General Petroleum Corporation and Misr Oil Processing Company (MOPCO) which will provide the gas originally intended for the defunct fertilizer plant.
“Damietta will begin a campaign against this contract similar to the campaign it held against the proposed plant, said member of the popular committee against the exportation of gas Abdallah Helmy.
Members of the committee met with civil leaders from Damietta last week to outline a course of action that will launch the new campaign against what is perceived as an unfair gas contract.
The campaign’s plan is to question the legality of changing the contract in court, as it is an illegal act, Helmy told Daily News Egypt
Newspaper reports place the price of the MOPCO deal – signed in 1998 for 20 years – at a third of current world prices, amounting to a loss of $600 million in just six months according to Helmy.
“Corruption is rife in long term gas contracts and the financial losses resulting from them are huge, Helmy said.
Agrium’s annual share of urea produced by MOPCO will eventually reach over half a million tons by 2011, or 26 percent of the plant’s total production which they will receive at the fixed price.
As stipulated by the original deal, if the Agrium plant had been built, the price of gas would have been reviewed in four years.
Residents of Damietta had opposed building the nitrogen plant near the tourist spot of Ras El Bar. Following a drawn out campaign, the government decided to cancel the project.
