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Algeria Inaugurates 3rd Trans-Med Pipeline Section.

Minister Khelil recently attended the official launch of Algeria's third Trans-Med gas pipeline segment in Bir el-Ater, in Tebessa province. The new 549-kilometre section is expected to increase the pipeline's transport capacity to some 7 BCM/year.

Algeria's first gas export system to Europe, Trans-Med, runs from Hassi R'Mel via Tunisia to Italy and to Slovenia. From Tunisia's Cape Bon, it 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 Algeria's state-owned company Sonatrach. Trans-Med's capacity has risen gradually from 12 BCM in the 1980s (see gmt7AlgerGasExprtFeb12-07).

The Tunisian section, operated by Trans-Tunisian Pipeline Co. (TTPC), has had its capacity reach 33.5 BCM/year in March 2009. ENI financed the 330m expansion. Sonatrach has expanded its section. These are the fourth and fifth expansions of Trans-Med. Italy is by far the biggest gas market for Algeria (see gmt7AlgerGasExprtFeb16-09).

Unlike foreign companies elsewhere, the operators in Syria are not allowed to lift or market the crude oils they produce. All the output must be sold to the state-owned Syrian Petroleum Co. (SPC) at prices set on the latter's behalf by a state oil marketing entity called Sytrol. Acting more like a committee than a company, Sytrol is attached to and functions under the control of the prime minister's office, whereas the SPC is controlled by the Ministry of Oil and Mineral Resources.

Sytrol is also in charge of pricing and marketing Syrian petroleum products allocated for export, and of importing petroleum products into Syria. Syrian imports, including a growing volume of LPG, are a heavy burden on the state as fuels in the country are retailed at subsidised prices.

Because the volume of crude oils allocated for export has fallen sharply since March 2003 (see omt12SyriaExportsMar22-10), the government has been strict in limiting sales to oil refiners and other end-users, rather than traders, contracted on term basis. There is also a destination clause in the term contract, to make sure no crude oil reaches Israel and any other market boycotted by the state. Export sales of petroleum products are less stringent. But the buyers cannot re-sell Syrian products to Israel.

Whereas Syrian crude oil prices are set officially every month by Sytrol, oil products sold outside Syria are priced according to spot market quotations. Generally, Sytrol prices of petroleum products are competitive.

The Damascus restriction followed a halt in Iraqi crude oil supplies to Syria on March 28, 2003, when US troops marching into north-western Iraq closed the old IPC pipeline at the Haditha pumping station. The pipeline had been carrying to Syria between 150,000-200,000 b/d of Iraqi crude oil since 2000 at a discounted price.
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Publication:APS Review Oil Market Trends
Date:Mar 22, 2010
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