Libya unfolds big plans for its sleeping gas giant
Geneva, Reuters World Service, April 22
Libya has unveiled plans to become a
major gas hub in the next millennium
with pipeline links to its North African
neighbours and major trading partner Italy.
Libyan oil and gas officials attending a
conference which ended in Geneva on
Tuesday invited foreign investors to help
develop Libya's huge and as yet untapped
gas reserves, described by one delegate as
the country's sleeping giant.
Italy's Agip (ENI.MI), which is leading the
charge to develop Libya's gas potential, says
discovered gas reserves are estimated at
54.3 trillion cubic feet. Production from these
reserves at the end of 1998 reached 17.51
trillion cubic feet.
''We have plans to tie in our gas network to
the Egyptian network in the east and the
Tunisian network to the west. In addition to
our joint project with ENI to supply gas to
the Italian market, and on through to the
rest of Europe,'' said Hammouda el-Aswad,
chairman of Libya's National Oil Corp (NOC).
U.N. and U.S. sanctions as well as the fall in
oil prices discouraged the rapid development
of gas projects but ENI plans to move soon
to develop offshore and onshore gas fields to
produce 10 billion cubic metres of gas per
year, of which 8.0 bcm will be exported to
Italy via a pipeline to Sicily.
Officials from ENI would not say when they
would issue construction bids for the $5.5
billion project, which is now expected to see
first gas delivery to Italy in 2003 and not in
2001 as some reports have suggested.
Libyan Energy Minister Abdullah el-Badri was
asked whether the project was likely to fall
foul of the U.S. Libya-Iran Sanctions Act
(ILSA), which penalises any company
investing more than $20 million in the Libyan
and Iranian energy sectors.
''The project was signed and approved
before ILSA came into effect,'' Badri replied,
adding: ''For me ILSA is dead and buried a
long time ago.''
A senior AGIP official said the company had
consulted Washington about the gas project.
Libyan officials are offering flexible terms to
encourage investment in gas. NOC said it
was willing to consider international gas
pricing methods for the local gas market or
oil for gas swaps and says commercial terms
would be negotiable.
Libya plans also to develop a domestic
market for gas by replacing oil with gas for
power generation. At present the
oil-producing country is using all the fuel oil
produced at its refineries but is keen to
switch to lighter products as part of its
marketing objectives.
''Gas is a sleeping giant now awakening.
The West Libya Gas Project and pipeline to
Italy, development of a gas grid and
connection to Tunis offers enormous
possibilities for investing in oil and gas in
Libya,'' said former Venezuelan oil minister
Alirio Parra, who co-chaired the conference. |
