Middle East Economic Survey

VOL. LII

No 41

12-Oct-2009

ALGERIA

Alnaft Approves Timimoun, Algeria’s Southwest Gas Project Takes Another Step Forward 

Algerian upstream regulatory agency Alnaft approved the development plan for the Timimoun gas project in southwest Algeria on 7 October, bringing the first phase of Algeria’s southwest gas development project a step closer to fruition. Timimoun is one of three gas concessions in the remote desert region that have been earmarked for simultaneous development – Touat, the first of these, was sanctioned in July – and which are together expected to bring 9 bcm/year of natural gas on-stream by 2013. Timimoun is a joint venture between Sonatrach (51%), Total (37.75%), and Cepsa (11.25%). The consortium members say the development plan, which is expected to cost around $1bn, involves drilling 40 wells on eight structures over an area of 2,500 sq km, as well as the construction of gas gathering and processing facilities. Timimoun is expected to reach a production plateau of around 1.6 bcm/y.

There have been doubts hanging over the Timimoun development plan. As Total’s Vice-President for North Africa Jean-Francois Arrighi de Casanova said last year, it is a small field, “with very difficult, tight gas.” On top of the technical challenges that this presented, the project was delayed by tough negotiations with Sonatrach over the price of gas that the foreign partners would receive (MEES, 10 November 2008). The Algerian state energy firm will market all the gas produced.

The two others concessions in the first phase of Algeria’s southwest gas project are Touat, jointly operated by Gaz de France and Sonatrach, which will produce up to 4.5 bcm/y (MEES, 13 July), and Reggane Nord, which is operated by Repsol-YPF in partnership with RWE-Dea, Edison and Sonatrach, and is expected to produce around 3 bcm/y of gas. The Spanish firm says it hopes Sonatrach will declare the development plan for its concession commercially viable in 2009. Sonatrach is responsible for building the new pipeline that will carry gas from the three concessions to Hassi R’Mel. Gas production at the giant Hassi R’Mel field is in decline, and with four major new gas export projects due to come on-stream in the next four years, Sonatrach is struggling to avoid a supply shortfall (MEES, 12 January).

Copyright MEES 2009.