New Fields to Boost Algerian Gas Output in 2017

Algeria is on track for more than 9 billion cubic meters a year additional gas output next year when three delayed projects in its south west come online, a source at state energy company Sonatrach said.

The third largest gas supplier to the Europe Union, Algeria has struggled in recent years to increase production of crude and natural gas because of low foreign investment to boost output at maturing fields and work new production.

For a year, European Union officials and energy firms have been pushing Algeria to adapt to more competitive markets, especially with the fall in crude prices, to attract the investment needed to pump more gas north again.

Among the projects are Touat Gas set for February 2017 with an estimated output of 12.8 million cubic metres per day, Timimoun in March 2017 with 4.6 million cubic metres per day, and Reggane will provide 8 million cubic metres per day in June.

"The three projects will come online on time, the outcome will reinforce our position as a reliable gas exporter to Europe. No delays, the projects will be delivered in 2017," the Sonatrach source told Reuters.

"Further in the south, we have found a huge potential of gas around the fields of Akabli and Tidikelt, in addition to Alrar's project in the east that will deliver gas and oil," the source said.

A drop in European gas demand dented Algerian exports that were squeezed by slowing production at mature fields, low investment and s rapidly increasing domestic need for gas to generate power.

Still, Sonatrach has invested to stabilise and increase production at its large, mature fields and expects to bring five new gas fields online in the south of the country despite delays from state bureaucracy.

Gas output is expected to reach 141.3 bcm in 2017, 143.9 bcm in 2018, 150 bcm in 2019 and 165 bcm in 2020, according to a Sonatrach document.

In another advance, Algeria's Tiguentourine gas plant resumed full production for the first time since a militant attack in 2013, after its third train came back online. The plant, operated with BP and Statoil with a full capacity of 9 billion cubic metres a year.

At its huge, mature Hassi R'mel field, Sonatrach has engaged in boasting operations to help bolster production.

Sonatrach is also due to recuperate by the end of 2017 important volumes of gas that have been injected in the past decades in Hassi Messaoud and its region.

Algeria is expected to export 50 billion cubic metres in 2016 to Europe, an increase of 15 percent in comparison with 2015, according to Sonatrach.

Algeria is seen as a natural partner for the European Union as it looks to diversify energy supplies after the Ukraine conflict exposed the risks of relying too much on the bloc's top gas supplier, Russia.