The Paris-based International Court of Arbitration (ICA) has told state energy giant Sonatrach that it must buy two Spanish firms’ shares in the Gassi Touil oil and gas development in eastern Algeria.
Repsol and Gas Natural won a competitive bid round to work on the $3bn development in November 2004. Sonatrach cancelled the contract to develop the field and an integrated gas liquefaction plant in July 2007.
The ICA told Sonatrach it must pay the two Spanish firms for their stakes in the project, but did not award any costs related to development work completed between 2004 and 2007. The ICA did not award any costs to Sonatrach.
Repsol, Gas Natural, and Sonatrach declined to comment on a likely value for the settlement.
The project was due to be completed in 2009, but will not start commercial operations until 2012-2013 as a result of the three-year arbitration.
Japan’s JGC was awarded an estimated $1.5bn engineering, procurement, and construction (EPC) contract to build gas processing facilities on the scheme in June 2009 (MEED 11:6:09). JGC’s contract is scheduled to be completed within 30 months of the award.
Algeria plans to launch $120bn of projects between 2009 and 2020 and plans to boost gas production to 170 billion cubic metres a year.