Algerian LNG Plant to Sell First Gas in July 2014

Source: Algeria Times 3/26/2014, Location: Africa

The gas liquefaction plant that Italian engineers Saipem built for Algeria's state-owned Sonatrach is expected to produce first gas for sale this summer, "we hope in June," LNG technology manager Anton Marco Fantolini said at an industry event in Goyang, South Korea.

The plant was entering the cool-down phase in the storage tanks, ready to test the LNG production, he said at the Gastech conference.

The plant is capable of producing 5.1 million mt/year if the ambient temperature is below 21 degrees C, he said, but the nominal output is 4.7 million mt/year. It is Algeria's largest LNG plant, he added.

Sonatrach agreed a price of $900/mt of annual output in December 2008, at a time when market prices were lower than they are now. Australian projects can cost 1 1/2 times that much per unit of output. Also the Arzew plant was an industrial site, not greenfield, Fantolini said, adding that labor costs were lower in Algeria compared with Australia.

Saipem planned the site allowing for the possibility of building another plant in the same area, which would cut the unit costs even more, owing to economies of scale and the use of the same infrastructure, such as the jetty, for both trains.

The jetty will be capable of handling vessels up to the Q-Flex size, or around 215,000 cubic meters. As a result of its decision to save space, such as using offshore flaring and splitting up the trains, the plant has a very small footprint in terms of hectares per unit of production.

However, there is no sign yet of Sonatrach proceeding with its option for a second train as it has not yet lined up enough upstream gas, sources have said.

If it comes on stream in June, it will be roughly the same time as the ExxonMobil LNG project in Papua New Guinea, which is coming on stream a few months early. That has two trains, totaling 6.9 million mt/year, with a small amount of condensate.

It is also possible that by June the Angola LNG plant will have hit its stride, although it got off to an uncertain start, and further maintenance is expected, the company said.

For more information about related Opportunities and Key Players visit Algeria Oil and Gas Projects

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