GDF Suez Drills at Touat in Algeria for Biggest E&P Project

GDF Suez SA, owner of Europe’s biggest natural-gas network, has drilled the first of 24 production wells at the central Algerian field of Touat and expects to begin output in 2016.

“The well was successfully drilled,” Jerome Chambin, a spokesman for the company, said by telephone from Paris.

GDF Suez has 65 percent of Touat and Sonatrach Group, the Algerian state oil and gas company, the rest. The project will be the Paris-based utility’s biggest for exploration and production with investment of 2.3 billion euros ($3 billion).

Production at Touat, about 1,400 kilometers (870 miles) southwest of Algiers, depends on the construction by Sonatrach of a pipeline linking the field to its northern network. GDF Suez (GSZ) will build a plant to treat gas before it’s transported.

Algeria is GDF Suez’s third-biggest supplier through long- term contracts after Norway and Russia, providing 12 percent of its total demand, according to the company’s 2011 annual report.

The utility signed a supply deal last year with Sonatrach for 1 billion cubic meters a year of gas over 20 years through the Medgaz undersea pipeline linking Algeria and Spain.

Developing the Touat project has been repeatedly delayed amid discussions about how the natural gas will be transported. GDF Suez, which became a partner a decade ago, expects 40 wells to be drilled in various phases of the project, expected to produce as much as 4.5 billion cubic meters a year at plateau.

The company also drilled a well in the eastern Sud-Illizi bloc in July and is evaluating its commercial viability.

The utility’s proven and probable gas reserves at the end of 2011 were 789 million barrels of oil equivalent of which nearly three quarters was natural gas. These were mostly in Norway, Germany, the Netherlands and the U.K., the 2011 annual report shows. Touat’s proven and probable reserves are estimated at 68.5 billion cubic meters of natural gas and 8.5 million barrels of condensates, according to data on its website.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.