Sonatrach to invest US$30 billion to boost pipeline natural gas output

“As part of Sonatrach's five-year investment plan (2023 - 2027) the sum of US$40 billion has been set aside and more than US$30 billion will be allocated to exploration and production with the objective of increasing production in the short and medium term, and preparing a portfolio of future projects, in particular for natural gas,” explained Sonatrach Chief Executive, Toufik Hakkar in his 2023 policy statement.

Liquefaction

The Sonatrach CEO said the company also planned, within the framework of the investment plan, to invest more than US$7 billion in refining, petrochemical, and gas liquefaction projects.

“These projects will promote the creation of added value to Algerian resources and will strengthen our export potential,” added Hakkar. “Nearly US$1 billion will be devoted to projects aimed at the company's contribution to the energy transition. These include flared gas recovery projects at production sites and the LNG plants at Skikda and Arzew,” explained the CEO. (Arzew and Skikda are liquefaction plants located on Algeria's Mediterranean coast.)

“Algeria's objectives through Sonatrach is to become one of the most important sources of gas supply in the world, thanks to our substantial reserves of natural gas and to the recent increases in production,” added Hakkar. “Discoveries in certain gas fields will generate a significant increase in the volumes of gas available for export, both via gas pipelines and LNG carriers,” stated the CEO.

Hakkar said Sonatrach intended to continue developing its gas potential with several projects to be commissioned in the next two years. These include, among others, the Hassi Mouina and Hassi Ba Hamou fields in southwest Algeria, and the Isarène and TFT Sud fields in the southeast of the country.

He added that other projects are planned for 2023 and 2024, notably in Hassi R'mel, Hamra, Ohanet, and Touat, and he said that he invited European countries to commit to long-term gas purchase agreements in guarantee their security of supplies.

Sonatrach also planned to take more action to reduce gas flaring, and money was being invested in the recovery of flared gas through several associated gas recovery projects and the overhaul of facilities, particularly in large production sites such as Hassi Messaoud, which has reduced the flaring rate to 2%.

“Other gas flaring recovery projects also concern production sites and LNG complexes and will, in the medium term, achieve the set objectives of reducing gas flaring to less than 1%,” said the CEO.

Sonatrach signed a contract in 2022 with two Chinese engineering companies, Sinopec Luoyang Engineering and Sinopec International Petroleum Services Corp., for improvement work at the Skikda LNG plant.

Work scope

The contracts include the dismantling of two 20-year-old storage tanks, the construction of a new tank of 150 000 m³ capacity, and the modernisation of jetty and loading facilities to accommodate larger vessels.

Algerian gas supplies are also carried to the EU on the Medgaz pipeline via Beni Saf in Algeria to Almeria in southern Spain. The Medgaz pipeline has been in operation since 2011, is 757 km (470 miles) in length, and has boosted compression to meet demand from Spain.

Read the article online at: https://www.worldpipelines.com/project-news/17012023/sonatrach-to-invest-us30-billion-to-boost-pipeline-natural-gas-output/