TAMANRASSET, Algeria- Algeria launched on Tuesday a 530 kilometre-long gas pipe to supply Tamanrasset, its biggest southern city, with 700,000 cubic metres per day, the CEO of state firm Sonatrach said on Tuesday.

"The project has cost around $190 million," Abdelmoumen Ould Kaddour told reporters during a visit to the city, located close to the border with Mali.

Algeria produces 94 billion cubic metres of gas per year, 55 billion cubic metres of which are exported. The new gas pipeline is linked to the In Salah gas field.

But growing domestic consumption is challenging Sonatrach, pushing its management to explore more fields and boost the ageing ones to increase output.

(Reporting by Lamine Chikhi Editing by Ulf Laessing and Louise Heavens) ((Ulf.Laessing@thomsonreuters.com; Reuters Messaging: follow me on twitter @ulflaessing))