REPSOL-YPF has started its gas production in the Salam gas plant in the Khalda concession, located in the Western Desert of Egypt.

This plant is a part of a major gas project initiated in June 1997 and has been successfully completed according to schedule and on budget.

The Khalda Concession Contractor Parties: REPSOL-YPF, Operator (50%), Apache (40%) and Novus (10%) have invested 300 million US $ to develop de gas reserves in this concession discovered during the last six years.

The Western Desert gas project consists of gas processing plants Salam and Tarek and a trans Western Desert gas trunk pipeline.

The Salam gas processing plant is designed to handle 200 MMSCF of gas per day, while the Tarek Plant, scheduled to be shortly in operation, is designed to handle 100 MMSCF of gas per day. The processed gas will be transported through a pipeline of 316 kms to connect with the Western Desert gas trunk pipeline starting at Salam and delivering the Khalda gas to the National Pipeline Grid system of Egypt at Ameriya area West of Alexandria.

The Khalda gas will be sold to the Egyptian General Petroleum Corporation, EGPC, under a take-or-pay Gas Sales Agreement for the quantity of 200 MMSCF per day. In addition Repsol and partners will also be selling another 50 MMCSF of gas per day which will be transported through a Southern Gas Pipeline under construction to transport this quantity to Dahshur South of Cairo.

These quantities of gas represent approximately 18% of the current total gas production of Egypt.