Every morning, the 45-year-old Tawfik Rahimi goes to one of the cafes in the city of Kasserine (in west central Tunisia) to meet several others who own land along on the route of the gas pipeline that runs from Algeria to Italy. They discuss the next steps they are going to take to pressure the Trans Tunisian Pipeline Company (Sergaz) to increase the rents it pays for land through which the pipeline passes.
For more than a year, we have been following the efforts of farmers and landowners in Kasserine Governorate to persuade Sergaz to increase rents on land that lies on the route of the trans-Tunisian gas pipeline and to obtain their rightful financial dues, at the rate they are demanding, for which they have been waiting since 2020.
This report shows that Sergaz, the local representative of the Italian company Eni, has failed to respond to the demand by farmers for increase in land rents and has not kept promises to support development projects, nor met its corporate social responsibilities (CRS) in Kasserine Governorate.
The trans-Tunisian gas pipeline, which consists of two separate pipelines, runs for 370km from the region of Ouled Marzouk, on the Tunisia-Algeria border in Kasserine Governorate, to Haouaria in the coastal governorate of Nabeul. It has five pumping stations - in the Feriana and Sbeitla regions of Kasserine Governorate, in Sbikha region in Kairouan Governorate and in the Korba and Haouaria regions of Nabeul Governorate.
It forms part of the Transmed pipeline, which runs north from the Hassi R’mel gas field in the Algerian desert all the way to Italy. Measuring 2,500km in total, it crosses hundreds of kilometres of Tunisian territory. The pipeline, under the management of Italian company Eni, carries 34 million cubic metres through Tunisia each year. The Algerian gas it carries provides roughly 30% per cent of Italy’s requirements.
1980 saw the establishment of the company Sergaz, with a capital of 99 million dinars ($32,000), under an agreement concluded on 25 October 1977, between the Tunisian government and the Italian Hydrocarbons Authority (Eni). This was designed to provide technical management and maintenance of the pipeline, which is owned by the Tunisian state and managed by Trans-Tunisian Gas Pipeline Company (SOTUGAT), part of the Tunisian Ministry for Industry, Mines and Energy. Eni has a 67% stake in Sergaz, while the Tunisian government owns 33%.
The Tunisian Company for Petroleum Activities (ETAP) holds a third of the capital in Sergaz. SOTUGAT contracted out to Sergaz the management of land rents, technical management of the transporting of gas, and maintenance of pumping stations.
Eni entered into a gas transporting contract with the Tunisian party to carry gas through the first pipeline in 1977. A 30-year contract was concluded with farmers in early 1979. In 2009, the agreement between SOTUGAT and local landowners was renewed for a further 30 years up to 2039.
In 1991, an agreement was made covering a second trans-Tunisia pipeline following the same route as the first. In 2019, shortly before the agreement expired, it was renewed for a further ten years, to run up to 2029.
On 2 July 2019, the Tunisian government, then headed by Youssef Chahed, announced the renewal of the agreement covering the second trans-Tunisia gas pipeline. Under this agreement, a continuation of the two previous agreements of 1977 and 1991, a percentage of transported gas was earmarked for the benefit of Tunisia, amounting to about 500 million dinars (about $162 million) annually. This represented an extra 41 million dinars approximately (about 13.3 million dollars) in annual fees payable to the Tunisian state, in exchange for Eni’s use of the pipeline's transport capacity.
The Italian side assumed responsibility for maintenance, development and rehabilitation of pipeline equipment at a cost of approximately $160 million, about 490 million dinars, over a ten-year period. The Tunisian government announced that Eni would also be responsible for providing Tunisia with 3.8 million cubic metres of natural gas - 65% of the country’s annual consumption, which reached 5,634 thousand tons in 2021.
The Tunisian Electricity and Gas Company (the only government company providing electricity and gas in Tunisia) meets an important part of Tunisia’s natural gas requirements via this pipeline, and this also plays a vital part in securing the country’s electricity supply.
On the basis of this renewed agreement, and the increase in royalties paid by Eni to the Tunisian state, farmers with land along the pipeline route expressed their desire for an increase in land rental fees.