Sonatrach has agreed to allocate capacity in the Europe-Maghreb and Transmed pipelines to allow MLE production to be exported to Europe, and the two companies will work together on marketing the gas.

'Algeria is ideally placed to be able to take advantage of the burgeoning gas market in Europe as well as the expanding LNG [liquefied natural gas] market across the world,' says a spokesman for First Calgary.

In early November, Sonatrach and BPsigned a 50:50 agreement with UK energy delivery company National Grid Transcoto deliver 500 million cf/d to the UK market from 2005 (MEED 31:10:03).

The award of front-end engineering and design (FEED) and engineering, procurement and construction (EPC) contracts is scheduled for 2004, with first production due in 2007. Estimated recoverable gas reserves from block 405b are 5.7 trillion cubic feet, and First Calgary plans further exploration work.

The Canadian firm, which is also active in Yemen, is planning to list on the London Stock Exchange within the next six months to help raise funds for the development. It is also in discussions with investment banks to raise further finance.

The smallest company operating a concession in Algeria, First Calgary was awarded an exploration licence for block 405b in 2001 and has since announced a number of promising discoveries (MEED 12:10:03).

Chief executive Richard Anderson recently described the firm as 'a little company gone elephant hunting'.