Algeria inks $668m gas contract with Petrofac-Bonatti

Algerian energy giant Sonatrach announced Tuesday the signature of a $668 million (486 million euro) contract with an Anglo-Italian consortium for the construction of a gas compression project in the Sahara desert. The contract was won by British oil and gas group Petrofac and Italian firm Bonatti. The project aims to maintain production levels at the Alrar Est and Ouest gas fields in the Illizi basin, where reservoir pressure is falling, and where output currently stands at 24 million cubic metres per day. Expected to take 32 months to complete, the project will also improve the treatment of natural gas liquids such as condensate and LPG. Algeria is the third largest supplier of natural gas to Europe, after Russia and Norway, although production at many of its older fields is in decline. A bloody hostage attack by armed Islamists in January on the In Amenas desert gas plant, one of the country's main upstream facilities, also in the prolific Illizi basin, has raised questions about the willingness of foreign firms to operate in Algeria.