Algeria to announce $2bn gas project prequalifiers

05 August 2015

Contractors in the running for Algerian field development project to be named within two weeks

  • The Ain Tisla field development project has a budget of $2bn
  • Companies from Europe, South Korea and China are seeking prequalification
  • The concession is operated by Petroceltic and Sonatrach

Prequalified companies for the $2bn Ain Tisla field development project will be announced within two weeks, according to a source close to the project.

Companies from Europe, South Korea and China are seeking prequalification approval ahead of bidding on the Ain Tsila field development scheme.

The concession is operated by Ireland’s Petroceltic and Algeria’s state-owned energy company Sonatrach.

Italy’s Enel also holds a stake in the project.

The invitation to tender for the engineering, procurement and construction (EPC) contract was expected to occur in the second quarter of 2015, but the project has seen significant delays due to problems related to financing.

In early August, Petroceltic decided to delay issuing $175m of senior secured callable bonds.

The debt is intended to fund the development of the Ain Tsila gas field in Algeria’s Isarene permit.

The delay was seen as a concession to ‘dissident’ shareholder Switzerland-based Worldview Capital Management, which owns 29.9 per cent of Petroceltic shares. 

Worldview has said it fears the bond issuance “will result in squandering shareholder value” by risking the Ain Tsila stake.

The Swiss firm is involved in a long-running battle with Petroceltic over its strategy. On 24 July, Worldview filed a suit against Petroceltic in the Irish High Court over its alleged failure to carry out a review of the company.

A previous lawsuit in the English High Court was thrown out for being in the wrong jurisdiction, and Petroceltic was awarded costs.

On 27 April, Petroceltic said the project was aiming to deliver first gas in the fourth quarter of 2018.

It is not known whether the project is still on track to achieve this target.

The companies looking to bid on the project are:

It is not yet known if all the companies will be approved to bid on the tender.

The field is estimated to hold reserves of 2.1 trillion cubic feet of gas, 67 million barrels of condensate and 108 million barrels of liquefied petroleum gas (LPG).

It is expected to be developed over a period of 30 years, during which 124 wells will be drilled. The field will initially start production from 18 vertical wells. Gas will be produced through a new gas processing plant at an annual average plateau rate of 355 million cubic feet a day (cf/d). Production is expected to remain stable for 14 years.

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