LNG IMPORTS FROM ALGERIA UNLIKELY IN 1987

  Liquefied natural gas imports from
  Algeria are unlikely to happen in 1987 even though its
  economically feasible, U.S. industry analysts sources said.
      Youcef Yousfi, director-general 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 U.S. government and
  the time required to restart mothballed terminals will delay
  the import until 1988/1989," Daniel Tulis, a natural gas
  analyst with Shearson Lehman Bros. said.
      Sonatrach is currently negotiating with two of its former
  customers, Panhandle Eastern &lt;PEL> and Distrigas, a subsidiary
  of Cabot Corp &lt;CBT> to resume LNG export, company officials
  told Reuters. A third, El Paso Gas, a subsidiary of Burlington
  Northern &lt;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 U.S. 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, Shearson's Tulis said.
     In this context, Algerian LNG import would be a source of
  supplemental supply to U.S. 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 U.S. spot market
  values.
  

