The UK's BP and France's Total announced in early December that they were each selling their 12 per cent stakes in the Eur 700 million ($927 million) project, which will supply 7,910 million cubic metres a year (cm/y) of gas to Europe from early 2009.

The company made the decision in order to focus on its exploration and production activity in the country, a BP spokesperson told MEED.

'We just didn't seem to be able to make things work with [state energy company] Sonatrach,' says a source at BP. 'We're disappointed it's a very strategic project for Algeria and it's

a shame that BP aren't going to be part of it. If there's a

[second phase] expansion of the project, we may be interested

in participating.'

Total withdrew when plans to supply gas to France in the project's first phase were dropped as a result of rising Spanish gas demand.

The shareholdings of BP and Total will be distributed among the remaining partners. The shares of Sonatrach and Cepsa are expected to increase to 26 per cent from 20 per cent, while those of Endesa and Iberdrola, both of Spain, and Gaz de France (GdF) are set to increase to 16 per cent from 12 per cent.

GdF on 11 December signed a final agreement with Sonatrach for the sale and purchase of 1,000 million cm/y of gas through the pipeline (MEED 8:12:06).