Algerian energy company Sonatrach will invest $3.2b over four years, including $530m in 2016, to increase its pipeline capacity as natural gas output rises from new and existing fields, a top company official said, Reuters reported.
The additional transport capacity aims to deliver larger volumes of gas as new fields in southeast and southwest are expected to add more output soon. The company stated that its goal is to guarantee increased supplies to European clients, however, no further specifics on amounts or timeline were given. The upgrade of the pipeline is in line with Sonatrach’s plans to restructure the company to better withstand the crisis, as it was announced last year.
Meanwhile, as Algeria had been hit hard by a 70% fall in oil prices since mid-2014, its revenue from energy fell by 50% last year and it has been struggling to attract foreign oil companies in recent energy bid rounds. The government is, however, determined to increase oil and gas production to keep up exports and meet growing local demand. It has targeted increased output from new and existing fields and expects to start producing from seven fields between now and 2018, according to the Energy Information Agency, The Oil and Gas Year reported. This includes the expansion of the Southern Fields project on the giant In Salah venture, operated by a joint venture between Sonatrach, BP, and Statoil, which was signed off by the government in February 2016.
Algeria produces 1.1mb/d of oil, and 27.44bcm of gas, according to official figures, but the decline in revenues has forced the government trim spending and freeze some infrastructure projects.