Spain's Compania Espanola de Petroleos (CEPSA) has signed a letter of intent with state-owned Algeria’s oil company Sonatrach for the long-term acquisition of natural gas. The gas will be used to meet CEPSA requirements and will be transported through the MEDGAZ pipeline.
This new agreement between CEPSA and Sonatrach will involve the acquisition by CEPSA of one billion cubic meters (BCM) per year of natural gas. Both companies have resolved to transport this gas through the future MEDGAZ pipeline linking Algeria and Europe via Spain. This gas volume, which will be available as soon as the pipeline is operational, could be increased in the future if both parties agree.
The deal will enable CEPSA to reinforce its presence in the deregulated natural gas market in Spain and will mean a further step forward in the process of developing the necessary infrastructures to meet the growing demand for this type of energy.
MEDGAZ is a company headed by CEPSA (20 percent) and Sonatrach (20 percent) and with shareholdings of other major European companies including BP, Endesa, ENI, Gaz de France and TotalFinaElf.
The project has been included by the European Commission in the proposed List of Projects of Common Interest in the energy sector, as it is considered of key importance for energy supplies in Europe. The gas pipeline, which will run from Beni Saf in Algeria up to the coast of Almería in Spain, will be able to transport between eight and 16 BCM per year of natural gas.
At the end of 1999, CEPSA became the first company to commercialize natural gas directly transported by ship to Spain making use of the new possibilities provided by the Hydrocarbons Act, and in 2002 will import 7,100 Gwh. Sales are made through CEPSA Gas Comercializadora, which currently has a share of 8% of the liberalized natural gas market in Spain.
In Algeria, CEPSA, in partnership with TotalFinaElf, was recently awarded a new exploration permit in the Timimoun Basin, an area containing numerous gas fields located in the southwestern part of the country. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
