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Gassi Touil Gas Production Delayed for 3 Years

Source: Reuters 11/30/2009, Location: Africa

Completion of Algeria's Gassi Touil gas production and LNG project has been delayed until 2012 or 2013; the Algerian official news agency quoted the head of state energy firm Sonatrach as saying.

The project, which originally was to have started up this year, has been held up by a two-year-long contractual dispute between Sonatrach and its former joint venture partners, Spanish firms Repsol and Gas Natural.

"Sonatrach is in the process of developing this project, which will be completed in 2012 or 2013," APS news agency quoted Sonatrach CEO Mohamed Meziane as saying late.

Gassi Touil, when completed, will be an integrated gas project combining production from an onshore field with a plant to convert the fuel into liquefied natural gas for export.

The joint venture between Sonatrach and Repsol and Gas Natural to develop the project was halted in 2007.

The Spanish firms said Sonatrach had unilaterally terminated the joint venture and taken exclusive control while the Algerian company said it would seek damages from Repsol and Gas Natural for failing to honour the terms of their partnership agreement.

The International Court of Arbitration last week ordered Sonatrach to acquire the Repsol and Gas Natural stakes in the project but did not award damages to Sonatrach.

Some energy analysts say delays in bringing new gas projects on stream in the next few years could make it difficult for Algeria to meet its export targets.

It suffered a setback last December when, in a licensing round for new oil and gas acreage, only four out of 11 contract areas were awarded because of lacklustre interest from foreign energy companies.

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