Gazprom Opens Office in Algeria

LONDON -- Gazprom opened an office on Monday in Algeria, its first in Africa, to forge closer ties with Sonatrach, the continent's largest natural gas producer.

The gas giant said in an e-mailed statement that it expected to work with Sonatrach in developing fields in Algeria, possibly in Northern Africa and in the countries to the south of the Sahara Desert. There will also be the potential for joint projects in Libya.

"We have given our office in Algeria a regional representation status," Alexander Medvedev, Gazprom's deputy chief executive, said in the statement. "We are ready to review possibilities for joint work at all three segments of the world gas market: American, European and Asian."

Algeria holds 4.6 trillion cubic meters of proved gas reserves, Africa's second-largest after Nigeria. Gazprom, the state gas export monopoly, and Sonatrach, Algeria's state-owned energy company, failed to renew a natural gas accord signed a year ago because they could not agree on joint projects, Algerian Energy Minister Chakib Khelil said Jan. 31.

"We decided jointly that we are going to the next stage of our cooperation," Medvedev said from Algeria in a phone interview. "We will concentrate on concrete projects."

Gazprom plans to swap gas supply volumes with Sonatrach to "optimize" fuel deliveries to Europe and beyond, he said. It may swap gas in pipelines for liquefied natural gas cargoes from Sonatrach or offer LNG from the Sakhalin-2 project in the Far East for Sonatrach LNG.

The two companies compete in the European market, where Gazprom is the largest supplier, with a share of about 25 percent. Sonatrach, which supplies around 10 percent of Europe's gas, plans to boost deliveries of the fuel by building two new LNG plants, expanding a pipeline to Italy and constructing two new links.

Gazprom said June 6 that it might help Nigerian National Petroleum build a gas link across the Sahara.