ALGIERS—Algeria has made an important gas discovery in the southwest province of Tindouf, Energy Minister Mohamed Arkab said on May 27, which could help the country boost exports and maintain its market share abroad.
Algeria is a major gas supplier to Europe but rising domestic consumption and a failure to increase production in recent years have threatened its export volumes.
"This field has positive indications. It has the capacity to produce some 275 cubic meters of gas and nearly 300 liters of condensate per hour," Arkab told state news agency APS as he visited the new field.
"The discovery of gas, for the fist time in this province, represents an important phase for the economy." He did not say when the field might start production.
Arkab said state energy firm Sonatrach would make further evaluations of the field's capacity.
Algeria, which produces about 135 billion cubic meters of gas a year, has started to renew supply contracts with European clients as current contracts are due to expire by the end of this year or in early 2020.
Algeria's economy relies heavily on gas and crude oil, and the government has drafted a new energy law offering incentives to investors in a bid to attract foreign firms.
Many foreign investors have stayed away in the past years, citing unattractive contract terms and bureaucracy.
The latest discovery was made by the Mako-1 well drilled about 10 km southeast of the Liza Field.
The Vaca Muerta Formation in the Neuquén Basin has technically recoverable resources of 308 trillion cubic feet of natural gas and 16 billion barrels of oil and condensate, according to the U.S. Energy Information Administration.
Equinor and partners are investing more than $7 billion in the development east of the Shetland Islands in the U.K. North Sea.