Sonatrach Signs with Total, Cepsa on Timimoun
Algerian state producer Sonatrach said it had signed a new contractual framework for the Timimoun gas project in southwest Algeria, with Total, Spain's Cepsa and Algerian upstream regulator Alnaft.
"These signatures mark a major step in the realisation of the project and the strengthening of historical partnership between Sonatrach, Total and Cepsa," said Sonatrach December 13.
Sonatrach said the Timimoun field, production from which is scheduled to start spring 2018, should reach about 5mn m3/d at plateau (1.82bn m3/yr). It also said partners signed the gas marketing agreement.
Development of the Timimoun gas field continued 2017 with drilling operations and works related to the construction of the plant, said Sonatrach; a total of 37 wells will be connected to gas gathering and treatment facilities connected to the GR5 pipeline connecting the southwest Algerian deposits to Hassi R'mel gas process centre. Timimoun is jointly operated by Sonatrach 51%, Total 37.75% and Cepsa 11.25%. The latter is a wholly-owned subsidiary of Abu Dhabi state-owned International Petroleum Investment Company (Ipic).
Sonatrach, Total and Cepsa were cleared to start development of Timimoun back in 2009, but the project became mired in Sonatrach spending cuts and disputes by Total and others over back-taxes. The statement from Algiers does not explain what specific terms will now relaunch the project.
Total and Sonatrach signed April 10 a "comprehensive agreement strengthening the existing partnership between the two companies" and said then they would sign a new framework deal for Timimoun.
Update December 14: Cepsa noted December 13 that Timimoun is its first gas field in Algeria, a country where it has been an upstream operator for 30 years. With Sonatrach as its partner, Cepsa operates in three Berkine basin oilfields: Rhourde el Krouf, Ourhoud, and Bir el Ms'ana which together produce a total of 137,279 b/d gross. Cepsa is also developing with Sonatrach the Rhourde er Rouni II field.
Cepsa also has a 42% stake in the Sonatrach-led Medgaz gas pipeline that runs from Algeria to Spain; the 210km subsea section is operated by Cepsa and can transport 8bn m3/yr; the Spanish company is believed to have held talks some 15 months ago on divesting all or part of its Medgaz interest but may have been persuaded by Sonatrach to retain its interest.
Sonatrach CEO Abdelmoumen Ould Kaddou (centre right) shakes hands with his Total counterpart Patrick Pouyanne, as Cepsa and Alnaft executives look on (Photo credit: Sonatrach)