ALGERIA - The MedGaz Pipeline Via Almeria.

Sonatrach and Cespa are main partners in a 450-km, 8 BCM/y marine pipeline called MedGaz being built from Algeria's north-western port of Beril Saf to Almeria in southern Spain which will be on stream at the beginning of 2006. All the Algerian gas to run along this route has been sold: 2 BCM/y to Gaz de France (GdF), and 1 BCM/y to each of Cepsa, ENI, Endesa, Iberdrola, TotalFinaElf (TFE) and Distrigaz of Belgium - the latter having signed a letter of intent with Sonatrach on Dec. 24, 2002. Distrigaz will take the Algerian supply to an 800 MW power plant in Spain to be built for its sister firm Electrabel and a combined heat and power plant near Barcelona built by another sister company Elyo. The three firms belong to the Suez group.

MedGaz, created in August 2000, will add another 8 BCM/y capacity at a later date as pipeline is to be extended to reach other European markets. MedGaz is owned 20% by Sonatrach, 20% by Cepsa, and 12% by each of TFE, BP, GdF, ENI and Endesa. These partners have assisted in the project's feasibility study. A power line will also run along the MedGaz route (see background in Vol. 56, Gas Market Trends No. 7).

PDF and MedGaz will allow for other African gas exporters to reach EU markets through Algeria. This is being discussed by Sonatrach and Nigeria's NNPC, which will be supplying gas by pipeline to Niger and Mali, after an initiative to that effect was made in 2000 by Algerian Energy and Mines Minister Chakib Khelil.