A group led by France's Total plans to develop a major gas field in Southeast Algeria and produce and market gas and associated condensate and natural gas liquids.
Combined gas and liquid hydrocarbon reserves are estimated at 1 billion bbl of oil equivalent. Project cost is estimated at $850 million.
Total, Spain's Repsol SA, and Algeria's state owned Sonatrach agreed to develop Tin Fouye Tabankort field under a 20 year production sharing contract (PSC).
The partners will account for investment in proportion to interests of 35% each for Total and Sonatrach and 30% for Repsol. The three will set up a joint venture company to serve as operator. Final approval by Algerian authorities is pending.
Plans call for building a two train gas separation/treating plant by 1998 to handle Tin Fouye Tabankort field production.
At that time, all wells planned for the project are expected to be on stream. Less than half of those wells have been drilled.
During the next 20 years, the plant is expected to yield 630 MMcfd of dry gas, 14,000 b/d of NGL, and 20,000 b/d of condensate. Development is expected to require 3 years and include drilling 50 wells and fracturing 30 existing wells.
Total and Repsol will be reimbursed for their outlays with a share of production allocated under terms of the PSC. They will transfer their shares of dry gas to Sonatrach in exchange for comparable volumes of NGL and condensate.
The dry gas will remain Sonatrach's property, but the three partners have agreed to reserve the right to market the dry gas jointly in the future.
Total and Repsol will pay a $22 million bonus when the contract with Sonatrach takes effect. The two foreign companies also will reimburse Sonatrach for the $71 million it has spent to date on Tin Fouye Tabankort development. This sum will be deducted from Sonatrach's share of future capital outlays for the project.
Field development will account for about two thirds of project cost, downstream facilities the rest. Contracts for engineering and construction were let to Brown & Root and Root/Condor, a joint venture of Halliburton Inc. and Sonatrach.
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