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Major European Companies Sign Gas Deals with Algeria
ALGIERS, Aug 13 (News Agencies) - The Algerian oil company Sonatrach and British Petroleum (BP) this weekend signed three contracts worth $2.5 billion (2.8 billion euros) for the development of gas reserves in the Algerian desert, news agencies reported.
Other companies involved include Kellog-Brown & Root, JGC, Bechtel and the Algerian drilling company ENAFOR, Agence France Press (AFP) reported.
When complete, the project is expected to yield nine billion cubic meters (315 billion cubic feet) of natural gas per year.
One contract is for a gas processing plant, pumping networks and infrastructures.
A second covers a 460-kilometer (275-mile) gas pipeline linking the largest Algerian gas field at Hassi R'mel to In Salah in the heart of the desert.
The third contract provides for the drilling of 71 production wells, officials said.
"The new quantities of Algerian gas available when this major project is implemented will confirm the role Algeria intends to continue playing on the international gas market, and the energy market of the European and Mediterranean region," Algerian Energy Minister Chakib Khelil said, quoted by AFP.
The move indicates that despite continuing political unrest involving Berber activists, a major foreign corporation is prepared to do big business in Algeria, according to BBC's online service.
A BP spokesman said that the In Salah development ranked as one of the company's largest three projects anywhere in the world.
Two hundred production wells will be built, together with a one billion dollar pipeline linking the gas reserves to the Algerian network, and on to Europe.
Italy has already agreed to buy nearly half of the 9 billion cubic meters of gas expected to come on stream by 2004, BBC added.
Algeria already supplies one-quarter of Europe's gas needs.
As the global environmental debate continues following the breakdown of the Kyoto agreement, Algerians are hoping that the growing demand for relatively clean natural gas as an energy source will help transform their economy.
Meanwhile, the Swiss-Swedish engineering group, ABB, said on Monday it has won a contract worth $93 million (104.5 million euros) to design and build a gas compressor station in Algeria, AFP reported.
The station makes up part of a pipeline 1,400 kilometers (875 miles) long that runs from Algeria to Europe under the Straits of Gibraltar, a company press statement said.
The new compressor will boost the pipeline's capacity to 11 billion cubic meters per year from the current eight billion, ABB added.
The Algerian oil company Sonatrach will also run the station. It is expected to be completed in 27 months.
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