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MORE ALGERIAN LNG DESTINED FOR SHIPMENT TO ITALY

July 11, 1994

Algeria's Sonatrach has agreed to supply Italy's Snam SpA another 2 billion cu m/year of liquefied natural gas beginning in 1996. The LNG will be sent from Algeria's Skikda liquefaction plant to the Panigaglia terminal at La Spezia, Italy, which has been refurbished to handle 3 billion cu m/year of LNG imports. Sonatrach plans to hike total exports of natural gas and LNG to 60 billion cu rn/year by 2000. Abdelhak Bouhafs, Sonatrach managing director, said the export target is based

Algeria's Sonatrach has agreed to supply Italy's Snam SpA another 2 billion cu m/year of liquefied natural gas beginning in 1996.

The LNG will be sent from Algeria's Skikda liquefaction plant to the Panigaglia terminal at La Spezia, Italy, which has been refurbished to handle 3 billion cu m/year of LNG imports.

Sonatrach plans to hike total exports of natural gas and LNG to 60 billion cu rn/year by 2000. Abdelhak Bouhafs, Sonatrach managing director, said the export target is based on proved exploitable reserves of about 3 trillion cu m of gas.

"Over the short term we have practically attained our 60 billion cu m/year goal in terms of marketing with supply agreements in excess of 58 billion cu m /year," Bouhafs said.

Half of the export volume is to be in the form of LNG, with renovation of Algeria's liquefaction plants currently at "an advanced stage."

Remaining exports will move through two gas pipelines: the Transmed line, where capacity is being doubled, and the Maghreb line, due for completion in early 1996.

The Algeria-Italy Transmed line capacity is being doubled by installation of additional compression.

This will boost Italian imports through the line to 26 billion cu m/year when it is completed in 1996. Imports through Transmed amount to 12.5 billion cu m/year at present.

Route preparation work on the Maghreb pipeline is expected to begin soon, with pipelaying due to start by yearend.

The project involves laying twin in. lines across the 395 m deep Strait of Gibraltar at the mouth of the Mediterranean Sea, with landfalls in Morocco and Spain.

J.P. Kenny & Partners Ltd., London, has been awarded the construction management contract for the Maghreb line. Construction and precommissioning work is to be completed by mid-1995.

Italy's gas consumption is about 50 billion cu m/year. The latest contract makes Italy the main importer of Algerian gas.

Snam will take a total of 21.5 billion cu m/year from 1996, while power generator Enel will continue to import 4 billion cu m/year.