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Algeria activates Medgaz pipeline

By Walid Ramzi for Magharebia in Algiers – 03/03/11

Algeria on Tuesday (March 1st) inaugurated the Medgaz submarine pipeline between Beni Saf and Almeria in Spain. Sonatrach CEO Nourredine Cherouati and his Medgaz counterpart, Pedro Miro, attended the opening ceremony.

Cherouati symbolically opened the valve, saying that gas will reach Almeria within three hours, to give confidence to Medgaz customers awaiting the official operation, which is scheduled for the first trimester of 2011.

The 1,050km long pipeline, 550km of which run through Algerian territories, cost about 900 million euros to build. With a depth of more than 2,000 metres under the sea, Medgaz will export up to 8 billion cubic metres of natural gas per year directly to Spain. Its total capacity is estimated at 11.4 billion cubic metres.

Sonatrach owns 36 percent of the pipeline, while Spanish companies Iberdrola and Cepsa own 20 percent each. Additionally, the stakes of Endesa (Spain) and Gas de France are estimated at 12 percent each.

Local environmental organisations expressed concerns about possible contamination in the event of pipeline damage. Sonatrach downplayed the fears.

"All aspects related to the environment were addressed at the first phase of the project, and therefore there is no risk of contamination, whether land or sea, both for the region or for the rest of the project pathway," the company management said.

Kouider Hadouche, one of the engineers who oversaw the project, explained that stations are equipped to automatically stop pumping in case of detecting a drop in gas pressure caused by leakage and empty the damaged part in order to start the repair.

He added that gas delivery will be halted during the repair, explaining that the duration of interruption will depend on the seriousness of the event. Hadouche stressed that "all cases of emergency were taken into account before and after technical testing".

Spain is one of the most important markets for Algerian gas. Algeria relies on European markets to export energy, which is Algeria's first source of income and accounts for 98 percent of the country's annual revenues.

Algeria plans on launching another project to allow gas exports to Italy via Sardinia. Galsi is still in the phase of technical studies to identify the investment potential of supplying Europe with natural gas. The pipeline will extend from Hassi al-Raml all the way to El Kala at a 640km distance and then to the Italian city of Cagliari under sea, extending for 310km. It will transfer an estimated 8 billion cubic metres annually, according to Sonatrach projections.

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