ENI: 25 YEARS OF GAS IMPORTS FROM ALGERIA-RENEWED COLLABORATION TO CARRY OUT NEW HYDROCARBON EXPLORATION AND PRODUCTION

Published November 14th, 2000 - 02:00 GMT

Eni Chairman Gian Maria Gros-Pietro and Managing Director Vittorio Mincato renew the collaboration with Algerian Energy and Mineral Resources Minister, Chakib Khelil and the Chairman of Sonatrach, Adbelhak Bouhafs, at the celebrations for 25 years of gas imports from Algeria to Italy.  

 

The Transmed gasline, which extends for nearly 2500 kilometers, provides Italy with about 25 billion cubic meters of natural gas each year. 

 

Eni and Sonatrach’s new exploration and production activities in Algeria will take oil production from the current level of 50,000 barrels a day to 120,000 in 2003. 

 

On 9 November 2000 at Hassi R’Mel in Algeria, where one of the world’s largest natural gas fields is to be found, the top management of Eni, the international energy company, and that of Sonatrach, Algerian state energy company, renewed their collaboration on the occasion of the 25th anniversary of the setting up of the Transmediterranean Pipeline Company (TMPC), the joint stock company which owns the Transmed.  

 

Participating at the event were the Algerian Energy and Mineral Resources Minister Chakib Khelil, Eni Chairman Gian Maria Gros-Pietro, Eni Managing Director Vittorio Mincato, Sonatrach Chairman Adbelhak Bouhafs, Snam Chairman Salvatore Russo, and General Manager of Eni-Divisione Agip Luciano Sgubini. 

 

The meeting was an opportunity to underline the importance of the process of integration between international energy systems. With the globalisation of markets, cooperation between countries is increasingly the means by which energy policies can be put into effect. Eni and Sonatrach established exactly this kind of synergy a quarter of a century ago. 

 

Eni was also the first foreign company to sign a production sharing agreement for the exploration for and production of hydrocarbons in Algeria, when the upstream sector was re-opened. Current production is running at about 50,000 barrels a day. 

 

Development is also being carried out of the HBN-N and ROD oilfields, where Eni and Sonatrach production will commence in 2003, to reach a production level of 120,000 barrels a day. 

 

Eni has also strengthened its ties with Sonatrach with the setting up of a joint exploration programme in the Yemen. The joint venture, of which Eni holds 60 percent and Sonatrach 40 percent, has been awarded two exploration blocks by the Yemeni government of significant mineral potential. 

 

"Thanks to its fortunate geographical position," - commented Algerian Energy Minister Chakib Khelil - "Algeria has a natural vocation for creating strong ties of cooperation with its nearest neighbors: the Maghreb countries, the countries on the northern Mediterranean coast, as well as the European Union, with which negotiations are underway regarding participating in euro-Mediterranean collaboration.  

 

In this context of good-neighbor relations, Italy is of prime importance thanks to reciprocal and profitable cooperation activities with Algeria. 

 

I am particularly pleased with the initiative to build a project of such strategic importance as the Algeria-Italy gas pipeline, which constitutes a true bridge between our two peoples.  

 

This work, which is the fruit of forward and innovative thinking, has made it possible to strengthen and develop our cooperation, already intense and wide-ranging, to the benefit of both our people and our countries." 

 

"The fraternal friendship which binds Eni to Algeria has been founded, for more than 40 years, on the strongest of roots." - declared Eni Chairman Gian Maria Gros-Pietro - "Eni's intuition in developing the gas market in Italy in the 70s, a period in which the large oil Companies still based their industrial policies around oil, opened up the way.  

 

Sonatrach and Eni were able to effect this strategy with their decision to build the Transmed. With this important project not only did the two companies impress themselves on the world stage, but also proved themselves capable of continuing this development thanks to the experience they gained in the process. I am delighted to reaffirm, on this occasion, the bonds of friendship which link us to this country". 

 

25 years ago, in 1975, the situation was radically different from what it is now. The first oil shock had dragged the industrialized countries into recession. In Italy GDP and demand were falling, inflation was in double figures.  

 

But it was precisely at this moment of crisis that a strategic sea change for energy policy was conceived, and Italy took the path which it continues to follow today, of diversification of energy supplies by type and point of origin. 

 

"Eni’s choice, and that of Snam, to build gas transmission infrastructure from distant countries" - stated Eni Managing Director Vittorio Mincato - "seemed then a difficult and even risky choice.  

 

The project was an innovative one both technically and financially. Italy was the first country to build import gas lines from distant countries not sharing common borders, with pipelines from Russia and Holland, operational since 1974. 

 

The Transmed was an addition to these systems, bringing Algerian gas to Italy via Tunisia and the Sicily Channel. Various companies were set up for the project, and a spirit of international collaboration was created which, effectively, provided the basis for the present-day system of integrated gas pipelines." 

 

The Algeria-Italy gas line was built in the second half of the 70s and came on stream in 1983. the first contract signed in 1977, was for the gas line to transmit 12.3 billion cubic meters of natural gas per year at peak levels. At the beginning of the 90s the gas line was upgraded, with the building of a second line parallel for the most part to the original one. 

 

Currently the two lines provide Italy with 25 billion cubic meters of natural gas a year. In addition to the gas passing through the Transmed, more than 2 billion cubic meters a year is regasified from liquefied natural gas (LNG) imported from Algeria. 

 

THE TRANSMED GASLINE: 

The Transmed is almost 2500 kilometers long, of which 156 are in the Sicily Channel, 550 in Algeria, and 370 in Tunisia and more than 1500 constitute the second line in Italy.  

 

The gas line reaches a depth of 611 meters in the Sicily Channel, still a record depth for the laying of a pipeline of this size. There are 11 gas compressor stations to transmit the gas along the pipeline. 

 

In building the Transmed 2500 men worked on the construction, in 40 sites, employing a total of 1 million tones of steel. For the upgrading of the line 22,000 high quality steel pipes were laid and 2.5 million cubic meters of soil were excavated and restored to their original condition after work had been completed. 

 

The experience and know-how developed in the building of the Transmed are the foundation of equally innovative projects developed by Eni, the most recent of which is Blue Stream. 

 

ITALIAN NATURAL GAS CONSUMPTION AND IMPORTATION: 

Italy consumed 22 billion cubic meters of natural gas in 1975, delivered via a gas grid totaling 13,000 kilometers. Today the Snam gas grid extends more than 29,000 kilometers in Italy and 3,105 kilometers abroad. 

 

Forecasts indicate that Eni, through Snam, will have transported 75.3 billion cubic meters of natural gas by the end of 2000. Sales in Italy will have reached 61.6 billion cubic meters and a total of 13.7 billion cubic meters will have been transported for Italian and foreign operators. 

Algerian imports constitute 37 percent of Eni’s energy requirements. 

Source:E.N.I 

 

© 2000 Mena Report (www.menareport.com)

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