The 220-kilometre pipeline, at a depth of 2,100 metres, will supply 8 billion cubic metres a year of local gas to Spain, where demand is growing by about 20 per cent a year (MEED 22:7:05; 17:6:05).

The four packages out to bid cover: the engineering, procurement, installation and commissioning (EPIC) of the 24-inch-diameter pipe; the EPIC contract for a compression terminal at Beni Saf, 100 kilometres west of Arzew, and a reception terminal at Almeria in Spain; the procurement of line pipe; and the procurement of three-five 30-40 MW compressors. All four contracts are expected to be signed in mid-2006.

The project also includes onshore sections in Spain and Algeria. The local/Spanish group Cosider-MASAhas already begun construction on the first of three contracts on the Algerian segment following an award in June. Technical bids were received in July for the Sougeur-Arzew section.

Spain-based Medgaz is composed of state energy company Sonatrach, the UK's BP, France's Total, Gaz de Franceand three Spanish companies - Cepsa, Endesa and Iberdrola. The project management consultant (PMC) team will be appointed from members of the Medgaz consortium and external engineering houses. The pipeline, to be entirely equity-financed, is due to come on stream by the end of 2008.