ALGERIA - The LNG Export Plants.

World LNG trade began in 1964 between Algeria and France. That was when the world's first liquefaction plant, Camel (later named GL4Z), came on stream in Arzew. And the world's first LNG import and regasification terminal was built by GdF at Le Havre.

Sonatrach has four LNG export plants built in the 1960s and 1970s. Their capacity by the early 1980s was over 30 BCM/y, the largest in the world. But actual output was less than half the capacity as term US clients, for whom two plants were built, failed to lift as the price was considered too high. West European clients reduced their purchases because Sonatrach's price was tied to the value of crude oil, then based on OPEC-set levels above $30/b, while prices of piped gas in the US were much lower. Piped gas in Europe was competing with lower priced fuel oil on the spot market. By the late 1980s the situation had changed. While crude oil prices were low with OPEC no longer in control, demand for gas was strong and the cost of building new LNG capacity rose. Sonatrach changed its marketing tactics and decided to restore Algeria's position as the largest exporter of LNG.

The three companies that built the four LNG plants - Sofregaz of GdF and the two US giants Bechtel and M.W. Kellogg - were contracted in Feb. 1990 to revamp them (see background in Vol. 56, Gas Market Trends No. 7).

                      OFFICIAL LNG PRODUCTION CAPACITY
                       (in billion cubic metres/year)

               Installed       Actual Production, 1989-91     Capacity
Plant          Old Capacity     1989     1990     1991       By Mid-1998
GL1Z Arzew     10.5              4.5      5.5      6.3         11.55
GL2Z  "        10.5-10.7         7.6      7.8      7.9         12.60
GL4Z  "         1.7              1.0      1.1      1.1          1.70
GL1K Skikda     7.9              4.0      4.4      3.9          7.90
               30.6-30.8        17.1     18.8     19.2         33.75

Although the official capacity is 33.75 BCM/y, Sonatrach executives say the four plants could produce up to 42.12 BCM/year (31.2m t/y).

GL4Z at Arzew (Camel), the first of its kind in the world, was built by GdF/Sofregaz and came on stream in 1964 based on a "classic cascade" process. GL1K at Skikda, built as the world's biggest LNG plant, came on stream in 1972 based on the Tealarc process, with ethane and LPG extraction units using the Prico process. GL1Z at Arzew came on stream in 1978 using the APCI process without LPG extraction. GL2Z at Bethioua, near Arzew, came on stream in 1981 (see background of the plants in Vol. 56).