In Salah partners sign $1.15 billion EPC contract

In Salah Gas Ltd., a partnership of Statoil, BP PLC, and Algeria's Sonatrach, has signed a $1.15 billion engineering, procurement, and construction (EPC) contract with Petrofac International (UAE) LLC for work on the In Salah southern fields development project in Algeria.

By OGJ editors
HOUSTON, Apr. 12
-- In Salah Gas Ltd., a partnership of Statoil, BP PLC, and Algeria's Sonatrach, has signed a $1.15 billion engineering, procurement, and construction (EPC) contract with Petrofac International (UAE) LLC for work on the In Salah southern fields development project in Algeria.

The In Salah central processing facility at Krechba will process the gas from the southern fields and remove the carbon dioxide for underground sequestration before the gas is piped to the national gas grid.

The EPC contract is part of the Phase 2 development of the In Salah license.

The three gas fields (Krechba, Teg, and Reg) in the northern part of the license, were initially developed in Phase 1, with the objective of delivering 9 billion cu m/year of gas. Phase 1 started in late 2001 and first commercial gas was delivered in July 2004.

Based on the expected decline of gas production from these three fields, Phase 2 will maintain the production plateau and sustain long-term gas sales commitments, according to the partnership.

Phase 2 includes four gas fields in the southern part of the license: Garet El Bifna, Gour Mahmoud, In Salah, and Hassi Moumene.

Under the EPC contract Petrofac will build several facilities including well pads, manifolds, flowlines, and a new central processing facility with a gas processing capacity of 17 million cu m/day. The central processing facility will be north of the town of In Salah and tied back to the existing producing facilities in Reg for further transport of the gas to the Krechba central processing facility for carbon dioxide removal and gas export.

The partnership expects first gas from the southern fields in the first half of 2014. The investment shares of the three partners are Sonatrach 35%, BP 33.15%, and Statoil 31.85%.

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