SACE, Italy's export credits guarantee agency, has guaranteed credit for expansion of the trans-Mediterranean gas pipeline.
The $7 billion expansion project will boost capacity of the line to 882-918 bcf/year from 441 bcf/year starting in 1994.
More capacity is required to handle new sales contracts for Algerian gas by ENEL, Italy's state electricity company, and increased throughput for the present user of the line, Italy's state gas company, Snam.
ENEL has agreed to buy 141 bcf/year starting in fourth quarter 1994 with an option for an additional 35 bcf/year. Snam will buy an added 247-282 bcf/year.
SACE 's agreement to back the expansion project was disclosed as civil unrest was growing in Algeria in the wake of government attempts to curb an Islamic fundamentalist movement.
The agreement followed 2 days of meeting between Italian Prime Minister Giulio Andreotti and Algerian Foreign Minister Lakhdar Ibrahimi. SACE said the agreement showed Italy's belief in Algeria's future.
The agreement is linked to two credit facilities, the first of which requires a guarantee of $127 million.
The 683 mile pipeline runs from Hassi R'Mel gas field, through Tunisia, under the Mediterranean Sea to Sicily, and from there to the Italian mainland.
Capacity of the section of the pipeline from Hassi R'Mel to the Tunisian border, currently rated at 565 bcf/year, will be increased by addition of its first compressors
A 229 mile, 48 in. loop will boost capacity on the 459 bcf/year Tunisian section from the Algerian border to Cap Bon.
The 441 bcf/year subsea section will be supplemented by two 24 in. submarine lines.
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