Algiers is to award the first contract on the $920m development of its gas concession at Timimoun in the southwest of the country by the end of this year.

Jean Francois Arrighi, head of Algerian operations at French energy major Total, which is leading the joint venture overseeing the project, tells MEED the scheme aims to produce 160 million cubic feet a day of gas from 2013.

The joint venture comprises Total, Algerian national oil company Sonatrach and Spain’s Cepsa.

The tender for the front-end engineering and design (Feed) contract, to be awarded by the end of 2009, will be followed by a tender for a single engineering, procurement and construction (EPC) contract by the end of 2010. The joint venture expects to award the EPC contract in the first quarter of 2011.

The company plans to drill 40 wells and build gas-gathering and processing facilities at Timimoun, as well as a distribution hub to connect the field to Algeria’s gas network.

Sonatrach is currently building a pipeline, GR3, to carry the gas produced at Timimoun to Algeria’s main distribution hub, Hassi R’Mel, in the centre of the country.

“We have a very serious logistics programme to accomplish to allow people to work efficiently in the area,” says Arrighi. “I was in Timimoun earlier this month and I can tell you that it is in the middle of nowhere.

“The remoteness of the area is taken into account in the cost. We have experience of the conditions because we have already drilled six wells at Timimoun.”

Arrighi says the budget for the project is $920m, rather than the $1.1bn that has been reported in local and inter-national media following a Sonatrach announcement on 7 October that it was going ahead with the scheme.

Sonatrach owns 51 per cent of the joint venture company, Total holds 37.75 per cent and Cepsa 11.25 per cent.