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ALGERIA - Gas Fields.

There are more than 15 natural gas fields in Algeria, of which ten have been developed on a large scale and are the country's main gas producers. The following are profiles of the main gas fields:

Hassi R'Mel is the first and by far the largest gas field in Algeria. It was discovered by the French in 1956 along with the giant Hassi Messaoud oil field (see OMT). Recoverable reserves have been estimated at 2,415 BCM. Probable reserves have been estimated at 2,700-3,000 BCM, and Algeria's total gas reserves in place are said to exceed 5 TCM. The field can produce up to 100 BCM/y from a Triassic Fm. Gas exports from the field are pumped by pipeline to the Mediterranean terminals of Arzew and Skikda. There are several pipelines from the field to supply the domestic market.

However, pressure at Hassi R'Mel has declined. Sonatrach has been re-injecting 62 BCM/y of gas to keep reservoir pressure. The field's gas is wet. It contains 200 grammes of condensates and four grammes of LPG per cubic metre, which has necessitated a partial recycling for the gaseous gas to be recovered. The liquids' recovery rate has fallen to a level close to the minimum rate of operation required for the gas treatment facilities. Under a $359m turnkey contract awarded in late 2000 to a Japanese consortium of Itochu and JGC Corp., the latter will install three major gas boosting compressor stations and 11 compression lines at the field by October 2003. This involves an initial phase. The second phase, yet to be contracted and to be completed in 2007, will add six compression lines to the enhanced recovery system. This will maintain pressure at a level allowing maximum recovery of condensates and LPG and will extend Hassi R'Mel's production life to 2020.

Around the field are oil producing structures which would be developed further. They have been on offer for partnership with foreign oil companies, together with oil producing structures around the Rhourde Nouss gas fields (see OMT). In order to maximise oil recovery, part of the gas produced at Hassi R'Mel is reinjected into these structures at high pressure through two 30 BCM/y compressor stations. Hassi R'Mel has processing facilities with a 100 BCM/y capacity to produce 91 BCM/y of dry gas, 18.2m t/y of condensates and up to 3.84m t/y of LPG. Most of these facilities were installed in the 1970s and 1980s. When Algeria's hydrocarbon industry was nationalised in 1971, Hassi R'Mel was only producing 4 BCM/y (see background in Vol. 56, Gas Market Trends No. 6).

Rhourde Nouss: The second largest gas producer located 270 km S-E of Hassi Messaoud, Rhourde Nouss is said to have 370 BCM of proven gas reserves and over 1 BCM of probable reserves. The area consists of five fields: Rhourde Nouss (the first discovery in 1980), Rhourde Nouss Sud-Est, Rhourde Adra, Rhourde Chouff and Rhourde Hamra. The gas is in a Triassic Fm at a depth of 9,850 ft. Around the fields are oil producing structures.

The fifth train in the area's gas processing plant, inaugurated on Feb.24, 2000, increased the system's capacity from 39.2 MCM/d to 48.3 MCM/d. The train can produce 3,860 t/d of LPG, 612 t/d of condensate and 46 MCM/d of dry gas. The $538m train was built by SNC Lavalin of Canada. The first four trains were built by Snamprogetti in the 1980s (see Vol. 56, No. 6).

Rhourde Chouff and Rhourde Hamra were brought on stream in 1992. The older ones were developed further by an Italian group led by Snamprogetti and completed in 1987. Facilities include a gas gathering/distribution grid of about 350 km, four degasolining units to process 41 MCM/d of gas from the Rhourde Nouss and Rhourde Adra fields and a 39 MCM/d reinjection station.

Alrar: Found in 1980 by Sonatrach, Alrar is in the south-west along the Libyan border north of Zarzaitine. Its recoverable reserves are estimated at 132 BCM of wet gas. The gas processing and recycling plant at the field came on stream in 1985. It has three identical and independent production lines and processing facilities for 18.5yMCM/d. It can produce 17.75yMCM/d of dry gas, 3,654 t/d of condensate and 2,212 t/d of LPG. Alrar West was found in the late 1980s and came on stream in 1996 (see Vol. 56, No. 6).

Gas moves from Alrar and nine other fields through a 7.5 BCM/y, 988 km pipeline, GR1, to Hassi R'Mel for injection. A parallel pipeline, GR2, was built by Bechtel. A northern section from Hassi Messaoud to Hassi R'Mel was commissioned in May 1997. The southern section from Alrar to Hassi Messaoud was completed in 1999. GR2's capacity is 10 BCM/y.

In Salah - BP: Located in District III, in the gas-prone Ohanet Basin which is the centre of Algeria south-west of Alrar, the remote and virgin In Salah region has 30 gas fields. On Dec. 23, 1995, BP and Sonatrach signed a 30-year PSA for the major to invest $2.7 bn to develop seven of these fields: Reg, Teguentour, Krechba, Garat El Baninat, Hassi Moumene, In Salah and Gour Mahmoud, covering an area of 23,000 sq km, with the distance between the first and last fields being about 350 km. Their total recoverable reserves have been estimated at 200-255 BCM, with potential reserves put at 1.4 TCM. The first of these fields was discovered in 1958 by the French Compagnie de Recherches et d'Exploitation de Petrole du Sahara. The gas is in a Lower Devonian Fm.

In 1978 Total Algerie, under a contract awarded by Sonatrach, launched a major delineation programme of the In Salah region to evaluate its gas reserves as well as the reserves of structures in the Nezla/Gassi Touil areas to the north-east of In Salah. The work was completed early in 1981, and the proven recoverable reserves of Reg, Teguentor and Krechba alone were estimated at 71.2 BCM.

The BP-Sonatrach deal, which resulted from five years of tough negotiations, came into force in February 1997. This is an integrated 50-50 JV to produce 9 BCM/y, with the first phase involving three of the fields to be on stream in 2004. But a related gas marketing JV is limited to a 4 BCM/y supply deal with Enel of Italy signed in 1997.

For the rest of the output BP has withdrawn, with Sonatrach to market the gas in Europe on its own, because of the major's concerns that it might break EU competition laws (see Gas Market Trends No. 7 of next week and background in Vol. 56, Gas Market Trends No. 6). In Amenas - BP: In November 2002 BP and Sonatrach formally agreed to a 50% increase in output from their In Amenas gas and condensate development JV in the Illizi Basin in south-eastern Algeria not far from the Libyan border. The $1.8 bn project now will produce 9 BCM/y of gas and 50,000 b/d of condensate and LPG from four fields.

Production is to begin in late 2005. Previously the two partners had planned for production to start earlier but at a lower rate of 6 BCM/y of gas and 45,000 b/d of liquids.

Sonatrach and BP awarded the $745m EPC contract for the In Amenas project to JGC/KBR, a 50:50 joint venture between Japan Gasoline Corp. and Kellogg, Brown & Root, a subsidiary of US oilfield services giant Halliburton. The contract involves gas processing facilities, product pipelines and infrastructure. Dry gas and LPG will be piped some 110 km to Sonatrach's pipeline grid at Ohanet. The same contractors are involved in the In Salah project. The EPC contract for the gathering system will be awarded in 2003.

The gas will be marketed entirely by Sonatrach and will be exported to Europe without BP involvement. BP will recover its investment by taking the output of condensate and LPG.

BP got the In Amenas equity from Amoco of the US, which it acquired in 1999. On June 29, 1998, Sonatrach and Amoco Algeria Petroleum Co. had signed a 20-year agreement for the development of gas fields in the In Amenas. The project was to produce 7 BCM/y from 2002. But BP and Sonatrach in 2000 scaled down the project to 6 BCM/y. Under the original deal, approved in September 1998, Amoco was to invest about $900m to develop the four fields. It was to spend $435m on the drilling of 80 wells. In addition, Amoco was to have a 700 MCF/d gas treatment plant, a 100 km pipeline and other facilities built.

The four In Amenas fields had already been discovered before Amoco came in. Amoco was to receive condensate and LPG for its share and all the dry gas will go to Sonatrach. Estimates of the reserves in the four field have risen to about 4.3 TCF of gas and 200m barrels of associated liquids. By far the biggest of four fields, Tiguentourine which will cost about $1.1 bn to develop, alone will produce 9 BCM/y for the first few years of the 20-year contract.

Sonatrach's unit Enafor will be drilling about 14 wells at this field. The other three fields, Hassi Frida, Ouan-Taredort and Ouad-Abecheu, will cost another $700m to develop.
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Publication:APS Review Gas Market Trends
Geographic Code:6ALGE
Date:Feb 10, 2003
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