Royal Dutch/Shell, the UK leading energy company, said Tuesday it would re-open gas exploration in Libya after its had signed an agreement with the country that faced EU and US sanctions for a long time.

"Libya’s integrated gas industry has enormous potential, based on its large gas resources and favorable geographic location. I look forward to our cooperation and believe that this is the beginning of a new lasting and fruitful partnership with Libya," said Malcolm Brinded, Shell’s executive director for exploration and production.

Shell will invest as much as $637 million in the deal with its partner the National Oil Corporation of the Great Socialist People’s Libyan Arab Jamahiriya, the company said in a statement.

Under the terms, Shell will upgrade and rejuvenate the Marsa al-Brega liquefied natural gas plant on the Libyan coast. The company will also explore five areas in the country’s oil- and gas-rich Sirte Basin. There is a possibility for Shell to develop a new LNG facility in conjunction with NOC.

Shell explored gas fields in Libya from the 1950s until 1974, then conducted exploration in the late 1980s.
The sanctions on Lybia were eased in 2003 after the country compensated $2.7 billion to the families of the people that had been killed in the 1988 bombing of a Pan American jetliner over Lockerbie, Scotland. Libya also promised to end programs to develop weapons of mass destruction.