State energy company Sonatrachsigned on 17 July two framework agreements with the Japan Bank for International Co-operation (JBIC) and Nippon Export & Investment Insurance (NEXI), covering the financing of future oil and gas projects awarded to Japanese firms.

The agreement with JBIC secures a credit line of up to $550 million to finance up to 60 per cent of a contract's value. The remaining 40 per cent share will be financed by loans from Japanese commercial banks, guaranteed by NEXI as part of the agreement with Sonatrach.

A number of Japanese companies are looking at forthcoming Sonatrach projects, including Itochu Corporationand Teikoku Oil Company, which are bidding on the giant Gassi Touil gas field development. Japanese firms are also understood to be in negotiation with Sonatrach for the reconstruction of three liquefied natural gas (LNG) trains at Skikda.

Sonatrach is also in negotiation with the European Investment Bank for financial assistance to help fund the construction of the Medgaz subsea pipeline and associated terminals (MEED 9:4:04).