ALGERIA - Exports By Pipeline.

Two pipelines are exporting Algerian natural gas to Europe: the TransMed line with a nameplate capacity of 24 BCM/y but actual throughput exceeding 27 BCM/y, to reach 27.5 BCM/y in 2004 and 30 BCM/y by 2005 through upgrades; and the 8.62 BCM/y Pedro Duran Farrel (PDF) gasline to Spain, which came on stream in late 1996. The PDF line is being expanded to 12.8 BCM/y by September 2004.

Two more pipelines are to be built, each to have a capacity of 8-10 BCM/y, one to run under the sea directly from Western Algeria to Spain and the other to run from Skikda to Italy and France through Sardinia and Corsica. Both should be operational by 2008.

TransMed & The Italian Gas Market: Algeria's first gas export system to Europe, the Trans-Mediterranean Pipeline, runs from Hassi R'Mel through Tunisia to northern Italy and to Slovenia. From Tunisia's Cape Bon, TransMed runs under the Mediterranean to Cape Feto in Sicily. It came on stream in the early 1980s. It is run by Trans-Mediterranean Pipeline Co. (TMPC), set up in 1975 as a JV of ENI and Sonatrach. TransMed's capacity has been increased gradually from 12 BCM in the 1980s to 18 BCM in the early 1990s and then to 24 BCM/y. Commissioning of the last expansion, completed in 1996, was delayed to January 1997 due to technical problems (see background in Vol. 56, Gas Market Trends No. 7).

Italy is by far the biggest gas market for Algeria. Algerian gas accounts for more than half of Italian imports. Demand for gas in Italy is to rise from 60 BCM/y in 2000 to 90-95 BCM/y by 2010. With Sicily taking 2 BCM/y of the gas, its local government (with wide powers of autonomy from Rome) is imposing a L10 transit tax on TransMed in the form of "compensation for the environmental damage caused by the pipe-line on the island".

In 2002, TransMed carried a total of 27.4 BCM. As in 2001, Italy's Snam took 22.3 BCM and Snam took 4 BCM. Geoplin of Slovania to 700,000 CM, up 200,000 CM from 2001, and ETAP of Tunisia took 400,000 CM as in 2001. In addition, Italy in 2002 imported 2.3 BCM of Algerian LNG, as in 2000, mostly on spot basis. The LNG was shipped to Italy's only regasification terminal of Panigaglia, 3.5 BCM/y, at the north Mediterranean port of La Spezia. Part of the LNG was bought from Gas Natural of Spain by Enel, the power utility which has moved into gas and is gobbling up distribution firms to become Italy's second largest gas marketer next to Snam.

In 2003 Italy is expected to import 28.8 BCM of Algerian gas by pipeline and in LNG form - up from 28.6 BCM in 2002, 26.8 BCM in 1999 when total Italian imports amounted to 49.5 BCM, and 22.8 BCM in 1998 when Italian imports totalled 42.6 BCM. The bulk of the gas is taken by Snam. Under a contract signed in the late 1970s and renewed in Dec. 1990 to 2018, Snam from 1997 became committed to buy 19.25 BCM/y as a minimum. This compares with a minimum of 17.5 BCM in 1995 and 11.5 BCM in 1994. Enel is committed to buy 4 BCM/y until 2014 under a contract signed in Oct. 1992. Enel began receiving the gas through Snam in Oct. 1996. Under a 20-contract signed in 2001, Enel raised by 2 BCM/y its commitment to buy 6 BCM/y of Algerian gas from mid-2004. This will come from In Salah, where a group of gas fields are being developed by a BP-Sonatrach venture (see profile in Gas Market Trends 6). The gas will be pumped through TransMed.