LNG Sales.

Sonatrach's main LNG client, GdF, has four contracts since March 1962: (C1) for 500 MCM/y until end-2002, extended to 2013 in May 2001; (C2) for 3.5 BCM/y from Jan. 1973 to end-2013; (C3) for 5.15 BCM/y from March 1982 to end-2013; and (C4) for 1 BCM/y until 2002, extended in late 2000 to 2013.

Actual GdF purchases have been higher. The C4 volume was in 2000 assigned to Med LNG & Gas, a 50-50 GdF-Sonatrach marketing venture to sell the gas on any market of its choice provided that the price is higher than the one under the C1-4 contracts.

Distrigaz in 1975 signed a contract for supply from 1982 to end-2007. The volumes rose gradually from 3.5 BCM in 1989 to 4.5 BCM in 1993. Since 1994, actual Distrigaz purchases have been higher. Distrigaz was to renew it purchase contract this year to another term.

Enagas in 1975 signed a contract to take LNG from 1978 until 2004 with the volumes to rise gradually from 2.5 BCM in 1989 to 3.5 BCM in 1992 and the subsequent years. Its actual purchases have been higher. The contract was extended in 2005. Enagas has been taking Algerian LNG from Distrigaz on spot basis; the differential above the Belgian firm's term price is split 50-50 with Sonatrach. Fluor has provided Enagas with PMC services for the expansion of a regasification plant in Huelva. This was completed in 2006. It added a new LNG tank and raised the capacity from 975,000 to 1.35 MCM/hour. The LNG is imported from Algeria, Egypt and other suppliers on spot basis.

Botas of Turkey in April 1988 signed a contract to take 2 BCM/y from 1993 to 2013. But it was only in mid-1994 that Botas began receiving Algerian LNG and in 1995, because of limited supply, Botas had to buy LNG on spot basis from as far a source as Australia. But because of a deep recession in Turkey Botas stopped taking Algerian gas from late 2000. It resumed purchases of Algerian LNG in 2003.

In December 2006, Sonatrach began delivering LNG to Botas at the private Aliaga receiving terminal near Izmir, on Turkey's Mediterranean coast. This is the second terminal in Turkey and has a 6 BCM/y re-gasification facility.

Distrigas of Boston (now Tractebel, of Suez group) has had three contracts with Sonatrach: for 750 MCM/y from December 1987 to 2003, in early 2002 extended to 2008; for 800 MCM to 1.3 BCM from October 1988; and for 3.6 BCM/y over six years from March 1989.

Snam, Italy's biggest gas utility, began receiving Algerian LNG from January 1997. Under a deal it signed in mid-1994 it was to buy 1.8 BCM/y, a level met in 1998. Under a May 1998 deal between Sonatrach, Enel and GdF, 1.5 BCM/y of Algerian LNG is supplied to Panigaglia by GdF. The volume was originally to have been delivered to Enel by Nigeria. GdF takes an equivalent volume from Nigeria in a swap deal with NLNG.

Panhandle of the US in April 1987 signed a deal to 2009 for purchases on consignment or netback basis, with shipments begun in the fourth quarter of 1989. But in recent years shipments to Panhandle have been negligible.

DEPA of Greece in February 1988 signed a contract to buy 600 MCM/y from 1994 to 2015. But its terminal was not ready until 1998, and DEPA only takes 600 MCM/y.

In the past four years, Statoil has increased its investment in Algeria significantly, with a major stake in the In Sallah and In Amenas gas ventures, with the latter on stream since 2006, and a licence to explore the Hassia Mounia gas field, as well bidding for exploration rights in the country's latest licencing round.

Statoil in November 2003 signed a contract to take 1 BCM/y of LNG from late 2003 to late 2006, which has been shipped to the Cove Point terminal in the US state of Maryland. Statoil has equity in this terminal to which it was to supply 2.4 BCM/y from its own Snohvit LNG plant in the period from late 2006 or early 2007 to 2023.

On Aug. 4, 2005, Statoil and Sonatrach signed a memorandum of understanding for an integrated gas E&P/LNG venture in Algeria. Under the same MoU, the two companies were to be partners in gas-related ventures outside Algeria.

E.ON Ruhrgas and Sonatrach on Nov. 17, 2006, announced they had signed a memorandum of understanding (MoU) for co-operation in LNG, with the German giant to LNG and market it within its EU network.

Poland hopes to receive its first shipments of LNG from Algeria by 2010-2011 as it seeks to diversify its energy suppliers. The Polish Economy Minister Piotr Wozniak and Algerian Energy and Mines Minister Chakib Khelil signed an MoU on this in January 2007. It was understood that Polish natural gas monopoly Polskie Gornictwo Naftowe i Gazownictwo (PGNiG) will begin exploratory talks on a possible LNG supply contract with Sonatrach, Wozniak said after talks with Khelil.

GAIL India Ltd, a state-owned company, in July 2006 began negotiating for the import of Algerian LNG starting in mid-2009. It is thinking of lifting 1.2m t/y over 25 years. The Algerian gas would be used to fuel the Ratnagiri power station (former Dabhol project) which currently runs on naphtha. According to the Press Trust of India, GAIL purchased a spot cargo of LNG from Sonatrach in May 2006. The ex-ship price of the LNG was $9.28/m BTU.

A 50-50 Sonatrach-BP marketing venture was in late 2003 reported to have acquired long-term rights to supply 500 MCF/d of LNG to a terminal on the Isle of Grain, East of London, for the UK market from 2005. Close to London, where energy demand is at its highest, the terminal was then being converted to a regassification plant to process 3m t/y. The terminal is owned and run by National Grid Transco (NGT).

Under an agreement signed in late 2003, NGT grants the JV import right for 20 years. BP was to source its share of the LNG from equity production and offtake agreements in Oman, Egypt, Abu Dhabi and other countries. Sonatrach's 250 MCF/d part was to be supplied from Algeria. The UK, now a net importer of oil and gas, is a rapidly growing market for LNG.

Shell and Sonatrach in mid-2002 signed an MoU to develop oil and gas fields jointly in Algeria and elsewhere. The deal covers upstream and downstream JVs, including a GTL plant to be built for export of ultra-clear fuels. Shell then said: "The intention [of the agreement] is to set up joint project groups to identify and evaluate opportunities throughout the energy value chain. The purpose...is to establish the framework terms and conditions for the sale and purchase of LNG on an individual cargo basis. It signals the start of further co-operation in the LNG business".

The integrated Gassi Touil gas E&P/LNG export project on Nov. 17, 2004, was won by a JV of Repsol/YPF (60%) and Gas Natural (40%). This was to explore for, develop and produce from fields on the western flank of the Berkine Basin, the heart of Algeria's oil province, said to have over 255 BCM, and to export in LNG form in a $3.5 bn project. A 4.5m t/y LNG train at Arzew will take the gas. The LNG will be marketed in Spain and the US. The train should be on stream in 2009. There would be another train if the Repsol-GN partnership can develop sufficient gas reserves at Gassi Touil.