Tunisia is increasingly turning to natural gas to meet domestic energy demand. The state-owned natural gas and electricity company, Societe Tunisienne de lElectricitÉ et du Gaz (STEG) has promoted the use of natural gas through an incentive system that began in 2005. According to STEG, natural gas represented 44 percent of the total initial energy consumption in Tunisia in 2005, compared to just 14 percent in 2003. OGJ estimates that in January 2006, Tunisia had 2.75 trillion cubic feet (Tcf) of proven natural gas reserves. Around two-thirds of the reserves are located offshore. In 2003, Tunisia produced 76 billion cubic feet (Bcf) of natural gas, while consuming 136 Bcf of natural gas during that same year.
The majority of Tunisias natural gas output comes from Miskar field, located about 80 miles offshore in the Gulf of Gabes. The field was discovered in 1975 by Elf, but is now fully owned and operated by British Gas (BG), the largest investor in Tunisias energy sector. According to BG, the field contains 1.5 Tcf of natural gas reserves. In 2005, Miskar field achieved record production levels of 200 million cubic feet per day (MMcf/d) of natural gas, which supplied more than 50 percent of Tunisias total natural gas demand. In collaboration with the Tunisian government, BG has installed new offshore compression equipment in order to expand the output of the Miskar field. BG has a Miskar natural gas sales contract with STEG, giving it the right to supply at least 230 MMcf/d on a long-term basis.
BG also holds the Amilcar and Ulysse exploration permits in the Gulf of Gabes. BG is looking to develop the Hasdrubal oil and natural gas field, which is located in the Amilcar permit. The company has indicated that the Tunisian government is close to finalizing a $600 million plan to develop the Hasdrubal field. BG is planning on bringing the Hasdrubal natural gas and gas condensate field onstream by 2009, with gross output of 30,000 bbl/d of oil equivalent. In 2007, BG intends to complete a drilling program in the Ulysse exploration permit area, also located in the Gulf of Gabes.
Tunisia has four other producing natural gas fields (El Franning, El Borma, Baguel, and Zinnia). Together, these fields account for most of the remaining domestic natural gas production.
The 20-year-old Trans-Mediterranean (TransMed) pipeline, with 1,300-Bcf-per-year-capacity, transports Algerian natural gas to Sicily, crossing the Mediterranean from Cap Bon. Tunisia receives royalties (5.25 - 6.75 percent value of the natural gas, in cash or in kind) from the pipeline as payment for access through its territory. In May 2005, Agip, which operates the TransMed pipeline along with Algerias Sonatrach, agreed to expand the capacity of the Tunisian section of the pipeline by 113 Bcf/year by 2008. In a second expansion to be completed by 2012, the capacity of the Tunisian section will be increased by an additional 117 Bcf/year, bringing total capacity to a maximum of 1,183 Bcf/year.