Announcement of Tunisia Gas Infrastructure Development Project on November 27, 1991

FOR IMM[DIAll RIl1AS1 'Norld Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. * Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 92/28 Contact: Fawzi Rihane Tel: (202) 473-2675 TUNISIA: GAS INFRASTRUCTURE DEVELOPMENT PROJECT The following is information about a project approved by the Bank's Board. DATE: November 27, 1991 WORLD BANK GROUP SUPPORT: World Bank loan: $60 million. The World Bank loan is for 17 years, including a five-year grace period, with a variable interest rate, currently 7.73 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.25 percent on the undisbursed balance. TOTAL COST: $98.6 million OTHER FINANCING: Societe Tunisienne de 1'Electricite et du Gaz (STEG), $38.6 million IMPLEMENTING AGENCY: Societe Tunisienne de 1'Electricite et du Gaz (STEG) ESTIMATED COMPLETION DATE: 1996 PROJECT DESCRIPTION: The objectives of the Gas Infrastructure Development Project are to: (a) provide a least-cost energy supply alternative for the Gabes region and other gas markets along the pipeline route to compensate for the depletion of the El-Borma oil field; (b) develop a gas infrastructure network in the southern part of the country to assist domestic gas field development; (c) promote increased penetration of natural gas in the industrial and premium fuels markets; (d) develop a sound gas subsector strategy while rationalizing and strengthening the subsector's institutional structure; and (e) develop an appropriate strategy for enhancing the security of gas supply and establishing a modern supervisory control and data acquisition (SCADA) system. The project will develop a 240-km gas transmission system linking the north and south of the country (between M'saken and Gabes). It will enhance the distribution network's flexibility in Tunis, while making necessary preparations for a future project aimed at enhancing the security of gas supply and establishing a modern supervisory control and data acquisition system for the country's entire gas network. The project will also provide the necessary funding for consumer service connections, metering and regulating stations, piping installation, and conversion of consumer's facilities from liquid fuels to natural gas for the 14 industrial consumers identified along the pipeline. The project includes the following components: (a) transmission/distribution system M'saken-Gabes; (b) transmission investment and feasibility studies to ensure the security of gas supply for Tunis; (c) a feasibility study to ensure the long-term security of gas supply; (d) gas subsector development and a rationalization study; and (e) technical assistance and training.