Eni, the Italian oil and natural gas company, acquires a stake in the Company set up by Spanish Cepsa and Algerian Sonatrach to carry out the feasibility study for the construction of a subsea natural gas pipeline, named Medgaz, connecting Algeria to Europe through Spain.
Eni has been selected, together with four other important European Companies (Spanish Endesa, French Gaz de France, French-Belgian Total-Fina-Elf and British BP), to participate in the new Company.
In the new Company Sonatrach and Cepsa hold 20 percent stake each while the other five European companies will have a 12 percent interest.
"We are satisfied - Mr. Vittorio Mincato Chief Executive Officer of Eni said - to have been chosen together with the European partners to develop this new project.
The Medgaz pipeline represents a further step in the strategy that we have outlined in our Strategic Plan, that is a large gas development program outside Italy, where we are planning to sell up to 10 billion cubic meters of natural gas per year by 2003."
We are strengthening our presence in the European gas market with projects of high technical and financial level -
Mr. Vittorio Mincato added - Medgaz represents an additional supply for whole Europe and enables us to contribute to meet, not only Spanish energy demand, but also that one of the whole Iberian Peninsula, where we already have a competitive edge thanks to the alliances with Spanish Iberdrola and Portuguese Galpenergia."
The know-how developed by Eni - Mr. Vittorio Mincato concluded - with the sub-sea pipelines Transmed (25 years of gas imports from Algeria in collaboration with Sonatrach) and Blue Stream (the new project with Gazprom for the connection of Russia and Turkey) represent an important skill for the carrying out of this new project.
The collaboration between Eni and Sonatrach dates back to a quarter of a century ago.
Since the first contract signed in 1977, which was followed in 1983 by the first gas supply, gas imports through Transmed have amounted to approximately 240 billion cubic meters.
Eni was the first foreign company to sign a production sharing agreement for the exploration and production of hydrocarbons in Algeria once the Country opened again the upstream sector. The current production is approximately 50,000 barrels of oil per day.
The new exploration and production activities of Eni and Sonatrach will bring the production from the current level of 50,000 barrels per day to 120,000 barrels in 2003.
Source : E.N.I