Egypt has made another push into the European gas market with a 20-year deal to sell liquefied natural gas to France.

The contract with state-owned Gas de France amounts to about 10% of France's annual gas consumption.

Gaz de France has signed a provisional deal with four firms - including the UK's BG Group - under which they will build and operate a $900m (�626m) natural gas liquefaction plant at Idku, near Alexandria.

"This is a big step forward for Egypt and good diversification of gas supply for Europe," said Robin Baker, head of the oil and gas division at French bank Societe Generale.

The other three firms taking part in the Idku venture are Edison International of Italy, Egyptian General Petroleum Corporation and Egyptian Natural Gas Holding.

Bidding to enter Europe

While the setting up a liquefaction plant is a costly venture, it is generally cheaper to ship liquefied gas than to lay pipelines, according to analysts.

The Idku plant is due to come on stream in mid 2005.

Under the agreement, Gaz de France has a 5% stake in the project.

The venture is Egypt's second gas-export project with a European company and follows an agreement in 2000 to supply Spanish electricity company generator Union Fenosa.

The first shipment to Spain under that agreement is due in 2004.

Egypt is trying to raise its profile in European utilities markets in order to boost exports of its plentiful gas reserves.

The north African country has proven gas reserves of 55 trillion cubic feet, according to government data.

The bulk of Europe's pipeline-supplied gas currently come from the Netherlands, Britain, Russia, Norway and Algeria.

Liquefied gas comes from Algeria, Nigeria, Trinidad and Tobago and Oman.