Seven firms to take part in Algerian-Spanish pipeline feasibility study

The chairman of Algerian Sonatrach said a total of seven firms will take part in a feasibility study of a gas pipeline linking Algeria to Spain. The firms include Sonatrach and Spanish partner Cepsa which launched the plan.
Sonatrach chairman and CEO Abdelhak Bouhafs, in Madrid for a seminar, said that the deal with the other five firms, which had been chosen from a total of 10, would be announced soon. "It is a question of hours or days (before we make the formal announcement)," he said.
He said that the feasibility study should be ready in about one year, so that the actual work will start around the end of 2001. A joint venture with initial capital of $ 500,000 between Sonatrach and Cepsa, which is owned 45 % owned by French TotalFinaElf, was announced earlier this year.

The project to build a gas pipeline between Algeria and Spain may be extended to other European countries across the Spain's northern border with France under the Pyrenees mountain range. "Spain may be a country of passage for Algerian gas through the Pyrenees but this has costs and we have to have imagination to cover those," Bouhafs told the seminar, adding that a deal with other European firms may be a way to meet such costs.
Spain's leading power firm Endesa and its smaller rival Union Fenosa have expressed interest in taking part in the project as gas demand is expanding fast as a source of energy for gas-fired combined-cycle power plants.
Earlier in November, Sonatrach said that Italy's oil group ENI was one of the partners in its efforts to expand in Spain's fast growing gas market. ENI recently signed a supply agreement with Spain's second-largest electricity firm Iberdrola -- which is currently merging with bigger rival Endesa. Bouhafs said Sonatrach's expansion plans include India, Europe and Latin America as areas of possible interest.