Amadeusz Juskowiak

Lng imports from algeria unlikely in 1987

Liquefied natural gas imports from Algeria are unlikely to happen in 1987 even though its economically feasible US industry analysts sources said

Youcef Yousfi directorgeneral of Sonatrach the Algerian state petroleum agency indicated in a television interview in Algiers that such imports would be made this year

Contract negotiations filing with the US government and the time required to restart mothballed terminals will delay the import until 19881989 Daniel Tulis a natural gas analyst with Shearson Lehman Bros said

Sonatrach is currently negotiating with two of its former customers Panhandle Eastern PEL and Distrigas a subsidiary of Cabot Corp CBT to resume LNG export company officials told Reuters A third El Paso Gas a subsidiary of Burlington Northern BNI has expressed no interest

Industry analysts said some imports of Algerian LNG were feasible On a marginal cost basis the companies that have made capital investment to handle LNG import can operate profitably even in the current price environment Frank Spadine an energy economist with Bankers Trust said

Analysts did not forsee a major impact from Algerian imports on US prices which are currently soft but expected to trend higher by the end of 1987

A decline in gas drilling and the time lag to bring Gulf of Mexico productions onstream will tighten gas supplies and firm prices Shearsons Tulis said

In this context Algerian LNG import would be a source of supplemental supply to US domestic production he added

Company sources currently in talks with Algeria agree saying that Algerian LNG would only serve to meet peak demand

Company sources also said that any negotiations with Algeria would emphasize looser arrangements which would relate volumes to market requirements and prices to US spot market values

Reuter