27th –28th March 2003Rome energy Meeting

Ali HachedExecutive Vice President, Sonatrach

Rome Energy Meeting

Rome, 27th –28th March 2003

SONATRACH INTERNATIONAL DEVELOPMENT

NATURAL GAS PROJECTS

27th –28th March 2003Rome energy Meeting

A NEW A NEW NATURAL NATURAL GAS EXPORTS TARGETGAS EXPORTS TARGET

Sonatrach has set a new gas exports target of 85 Bcm/year by

2010, taking into account :

- The renewal and increase of its gas reserves

- The emergence of market opportunities as a result of a strong

growth rate (World : 3.2%/year, Europe : 1.9%/year).

- The strengthening of our activities abroad and the

diversification of our portfolio

27th –28th March 2003Rome energy Meeting

A NEW A NEW NATURAL NATURAL GAS EXPORTS TARGETGAS EXPORTS TARGET

According to SONATRACH medium term Business Plan, NG and LNG exports will respectively reach an annual growth rate

of 4,8% and 4,4% during 2003-2007

1988-1992 1993-1997 1998-2002 2003-2007Crude Oil 6,3% 2,1% 3,5% 12,3%Condensate 0,3% -1,5% -2,2% 4,2%LPG -0,6% 9,1% 6,5% 7,1%NG 9,2% 12,9% 3,5% 4,8%LNG 7,0% 4,8% 2,5% 4,4%

Total 5,8% 4,4% 2,1% 5,9%

Annual growth rates of our exports 2003-2007

27th –28th March 2003Rome energy Meeting

Strengthening its presence on the entry points to Europe

Extension of existing export gas pipeline capacity (Pedro Duran Farell, Enrico Matteï)

New direct gas pipelines (Medgaz, Galsi)

New regasification terminals (Reganosa, others in discussion)

Downstream Integration

Direct investments in power plants (Cogeneration, CCGT)

Joint marketing companies

Increasing shipping capacity

Two 140 000 cm-class ships and one 70 000 cm-class ship to

reach a total shipping capacity of more than 1 billion cm.

SONATRACH NATURAL GAS STRATEGY

27th –28th March 2003Rome energy Meeting

24 Bcm32 Bcm

MATTEI

8.5 Bcm8.5 Bcm

FARREL

11.5 Bcm

+ 8 Bcm (2006)

+ 3 Bcm (2004)

EXPANSION OF THE EXISTING PIPELINES CAPACITY

Enrico Mattei (Former Transmed)

Pedro Duran Farell (Former GME)

27th –28th March 2003Rome energy Meeting

MEDGAZ

Direct line Algeria–Europe via Spain

(8-10 Bcm/year, starting 2006)

Partners : Sonatrach, Cepsa,BP, Endesa, Eni, GDF,TotalFinaElf

NEW NATURAL GAS EXPORTS PIPELINES

Beni Saf

Hassi R’mel

MOROCCO

ALGERIA

SPAIN

C.d.Pescaia

Olbia

El KalaEl Kala

Hassi R'mel

GALSI

Direct line Algeria–Italy via Sardinia

(8 Bcm/year, starting 2008)Partners : Sonatrach, Edison, Enelpower, Wintershall, EOS Energia

27th –28th March 2003Rome energy Meeting

Location : Mugardos

Capacity : 2.5 to 5 Bcm/y

Partners : Endesa, Union

Fenosa, Tojeiro Group, Xunta

de Galicia, Caixa de Galicia,

Caixa Vigo, Banco Pastor

Operating Company :

REGANOSA

REGASIFICATION TERMINAL - REGANOSA

27th –28th March 2003Rome energy Meeting

SONATRACH IN THE GAS DOWNSTREAM

Participation in cogeneration units (Spain, Italy)

Participation in CCGT plants (Spain, Italy…)

Tolling (Italy, Spain,…)

Export of power produced in Algeria (Italy, Spain,…)

27th –28th March 2003Rome energy Meeting

TOWARDS A GLOBAL LNG MARKET

Costs reduction enables the development of new

LNG projects

Arbitrage opportunities for both buyer and seller

Cooperation among suppliers (GECF)

27th –28th March 2003Rome energy Meeting

France

Belgium

USA

Turkey

Spain

Slovenia

Italy

Portugal

Greece

AlgeriaAlgeria

2%89% 67%

21%

40%

35%

23%

25%

Algerian natural gas share in gas imports

24%

TunisiaTunisia

100%

LNG44%

Pipe 56%

SONATRACH : A MAJOR NATURAL GAS SUPPLIER

Natural gas exports : 60 Bcm

27th –28th March 2003Rome energy Meeting

27th –28th March 2003Rome energy Meeting

A NEW LEGAL FRAMEWORK IN EUROPE

Create disruption risks and

weakens the supply chain

Create risks on gas

projects financing

Delay new projects /

create additional costs

Create Instability and

uncertainties for both

producers and clients

Affect the equilibrium of

long term contracts

EU wishes to set up a single and open gas market may :