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Abu Dhabi, UAESaturday 23 June 2018

Algeria pushes back Timimoun first gas output to 2019

North African producer had awarded development rights to the project to a Sonatrach, Total and Cepsa consortium in 2009

The In Salah Gas (ISG) Krechba Project, run by Sonatrach, near In Salah, Algeria. Adam Berry/Bloomberg News
The In Salah Gas (ISG) Krechba Project, run by Sonatrach, near In Salah, Algeria. Adam Berry/Bloomberg News

Africa’s largest gas producer Algeria is expected to start gas production from its Timimoun field in 2019 - two years later than planned - with negotiations for contracts to potentially supply Europe currently underway, according to the Spanish energy firm Cepsa, which is one of the stakeholders in the field.

“We’re close to finishing development of the area, we’re still making more drills and developing all the surface facilities and should be in operation some time in the beginning of 2019,” the Cepsa chief executive Pedro Miro told The National in Abu Dhabi.

Discussions are currently underway to potentially take gas from Timimoun, which is expected to produce 1.6 billion cubic metres annually into Europe through the 757km Medgaz pipeline linking the North African state with Spain.

“The gas contract is being negotiated right now and to my knowledge this has not been completely defined. Cepsa is the main investor partner and partner of Sonatrach in Medgaz, which is a huge pipeline - the only one - linking directly Algeria with Europe through Spain. We built it with them, we’re the two main shareholders.

“If the possibility exists, we’d be delighted to bring this gas into Spain or into Europe,” he added.

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Cepsa holds a 42 per cent per cent stake in the deepwater gas pipeline, with the remainder being held by the Algerian state oil producer Sonatrach (43 per cent) and the Spanish firm Gas Natural (15 per cent).

Sonatrach holds a 51 per cent operations stake in the Timimoun field, located in the south-west of the country, with the remaining share held by the French oil major Total (37.75 per cent) and Cepsa (11.25 per cent).

The consortium was awarded development rights to the field in 2009 with first gas planned for 2013 but the project has repeatedly missed deadlines for production.

Algeria has shown tepid signs of reviving stalled gas projects. Sonatrach had planned to bring gas from the Reggane and Touat fields online this year. However, last month, it announced that the Touat development project, valued at $1 billion with an annual capacity of eight million cu metres, had been pushed back to the first quarter of 2018.