Tunisia is positioning itself to become a gas exporter in 2012, helping to offset the gradual decline in oil production, according to state-energy firm ETAP’s Chairman Khaled Becheikh. First gas from the BG-operated Hasdrubal field is finally expected at the end of this month, and a number of other onshore and offshore projects are expected to lift gas output over the next three years. But, as with other producing countries in region, the volumes and timing of ETAP’s gas export plans remain hard to pin down, given the sharp rise in domestic consumption.

Mr Becheikh told delegates at the North Africa Oil and Gas Summit in Tunisia on 28 October that an extra 4mn cmd (1.5 bcm/year) of capacity will come on-stream in 2012 with the completion of the South Tunisia Gas Project (STGP). Mr Becheikh said this would be the fifth in a string of gas projects, starting last year with the Chergui field, that would include the Hasdrubal, Maamoura and Baraka offshore field developments and would together cost $3.2bn. Gas from the southern gas fields alone is expected to help satisfy the local market, according to the ETAP chairman, so that any surplus production could theoretically be exported.

‘A Stable Political And Business Climate’

The volumes from these various projects are small in comparison with its OPEC neighbors. But Tunisia benefits from having a much more attractive investment climate than Libya or Algeria, and much of the gas lies in deep reservoirs that require advanced extraction technology. As well as BG, international oil companies (IOCs) active in the Tunisian upstream include Eni, OMV and Pioneer Natural Resources, all of which plan to contribute to the rise in Tunisian gas output. Upstream investment is expected to fall by 30% this year, from a high of TD2.78bn ($2.1bn) in 2008, but some TD1.64bn ($1.3bn) is nevertheless due to be spent on development projects.

Hasdrubal is the biggest gas project the country has witnessed since Miskar, also operated by BG, was brought on-stream in 1995. Originally due to start up earlier this year, the $1.6bn Hasdrubal development, which like Miskar lies in the offshore Amilcar permit, was delayed primarily by the complexity of the onshore gas processing plant. The field will produce just under 100mn cfd (1 bcm/y) of sales gas, or approximately 20% of Tunisian gas demand, and 16,000 b/d of liquids. Miskar is currently producing around 1.7 bcm/y, and BG says it will continue to invest in Tunisia’s biggest field to maintain production there, although the next phase of its development contains higher levels of sour gas.

BG Tunisia’s Chief Operating Officer Roger Coe told the conference why the British firm was so committed to investing there: “Tunisia has a stable political and business environment, which makes planning much easier. It continues to be a growing economy. The authorities are transparent and accessible. And there is a dedicated local work force.” The company’s cumulative investment in Tunisia to date amounts to around $3bn.

Surging Local Demand

Other key gas projects for Tunisia are the $110mn Chergui development, carried out by Petrofac, which was brought on-stream in August last year and currently produces 31mn cfd (0.3 bcm/y), according to the UK firm’s CEO Amjad Bseisu, and the Eni-operated Mamoura and Baraka fields, which will cost an estimated $640mn and add around 0.5 bcm/y by February 2010. Finally, the STGP aims to bring gas from four concessions in Tunisia’s deep south, including Jenein Sud, for which operator OMV has just submitted its development plan. It will send gas from the south via a 24in, 320km pipeline to Gabes.

For the moment, Tunisia relies on gas from the TransMed pipeline that transits the country, on its way between Algeria and Italy, to make up for the production shortfall that currently exists. According to the Ministry of Industry and Energy, and Small and Medium Businesses, 2009 gas consumption is due to reach 4mn tons of oil equivalent (4.5 bcm/y), representing a rise of 15% on 2007, and compared with annual production of around 3 bcm. Furthermore, as ETAP’s Mr Becheikh himself said, Tunisia aims to cover 60% of its energy consumption with natural gas by 2014, compared with 40% in 2007 and just 5% in 1980. But exploration activity has produced good results since February last year, with 10 oil and gas discoveries confirmed, and the infrastructure to export gas to Italy already exists.

“Tunisia boasts the highest exploration success in North Africa over the last 10 years,” said Craig McMahon, Wood Mackenzie’s lead analyst for Middle East and North Africa research. “Further discoveries are very possible, which suggests that Tunisia could indeed be a gas exporter. But Wood Mackenzie doesn’t see that happening before 2014.”

Sliding Oil Production

Separately, Tunisia continues to battle reservoir depletion at its mature fields, where production stood at 80,000 b/d in September, compared with an average of 86,000 b/d last year. In this vein, OMV is carrying out a major revamp of the Ashtart field, Tunisia’s first offshore oil producer, while Pioneer’s Shurouq field has helped to stem the slide in output, coming on stream in 2007 and currently producing 8,500 b/d. Meanwhile, Eni is due to drill infill and replacement wells at the Adam field, Tunisia’s largest, and like Pioneer at Shurouq and OMV at Ashtart, may implement gas lift plans. 

Illustrating the scale of oil reservoir depletion in Tunisia, production at the Ashtart field peaked in the 1970s, at 60,000 b/d, but has now fallen to around 8,500 b/d. OMV says the revamp, which will raise output to around 11,500 b/d over the next three years and extend the life of the field, involves installing a new gas lift compressor and two power generation units, as well as reducing flaring and producing 500 b/d of condensate. Sidetrack drilling is due to be completed in mid-2010, with the gas lift coming into effect in 2011.

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