Algeria-Tunisia gas pipeline tramples on rights of Tunisian farmers

clock icon 12/11/2023

Report by Jihane Nasri

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.

Demonstrations by farmers calling for increase in land rents

Farmers in Kasserine Governorate, across whose land the Algerian pipeline passes, have been waiting since late 2020 for the Trans-Tunisian Pipeline Company (Sergaz) to pay them the money due for the ten-year rental of their land.

On 1 October 2021, a number of landowners in the province staged a demonstration outside the pumping station in El Garaa El Hamra, in the administrative district of Southern Kassrine, to demand payment of money owed to them.

They also demanded an increase in rental payments, since the annual amount paid per square metre was no more than 0.5 dinars ($0.16). It had been 0.13 dinars per square metre under the agreement relating to the first pipeline.

When we asked the spokesperson for the association of landowners on the gas pipeline route, Towfik Rahimi, he said this had been the first demonstration of its kind since the agreement between the Tunisian and Italian sides had come into effect.

Rahimi also said that the landowners maintained that Sergaz had imposed this rental rate on them with no negotiation or consultation, and that they had hoped for a rate of at least 12 dinars per square metre, based on the placards they held up during the October demonstration.

Photos of the protest

We attempted to have look at the agreement between Tunisia and Eni, and submitted a request for a copy to the Tunisian Ministry of Industry, Energy and Mines, but they refused. An official said the reason was that the relevant documents “were covered by a legal exemption, set out in Basic Law 24 No. 22 of 2016. This gives officials the right to reject requests under the freedom of information act, if this could harm national security, national defence or international relations.”

Response of official in charge of the “right to access information”

Ammar Nasri is a 63-year-old landowner in the Aouija region of Southern Kasserine. The two gas pipelines cross the land he and his brothers inherited from their father. Neither Ammar nor any of his brothers have a land rental contract with Sergaz for either of the two pipelines. Ammar, along with fellow members of the Landowners Association, is seeking to persuade the company to increase the rent, especially since most of them are living in difficult social circumstances.

Ammar says: “Sergaz imposed on us a price of 500 millims ($0.16) per square meter for ten years through experts they had appointed. We do not know what criteria they used in setting this amount.”

Video of Ammar Nasri

On 20 October 2021, a number of farmers from all districts of Kasserine Province, whose lands lie on the path of the pipeline, complained to the Tunisian Ministry of Industry, Energy and Mines and called on it to intervene to resolve what they called an “injustice committed against them” by the company.

The farmers pointed out that their contracts with Sergaz had expired and they had not received their due payment. They claimed that they had informed the company that the payment period had expired. The level of payments due to farmers varies according to the area taken up by the pipeline.

The farmers also complained at what they saw as “patronising and belittling” behaviour of the company, and its efforts to impose a “paltry and insulting” price of around 500 millims ($0.16) per square metre per year. The farmers also demanded direct negotiations with the parent company (Eni), without intervention by a mediator or third party, under the supervision of the regional and national authorities concerned. They also called for “the land rental issue to be handled with transparency.”

This was not the first time farmers had complained to officials; it happened several times, but there has been no resolution.

We asked the then governor of Kasserine, Adel Mabrouk, about the position of the governorate towards the farmers’ demands. He gave both a legal and a technical answer, saying the issue lay outside the authority of the governor, and that he had referred it to the local Sergaz officials.

Text of complaint sent to Ministry of Energy and Mines

These protests stem from what the farmers regard as the failure by the general manager of Sergaz to keep the promises he made to them during a visit to Kasserine Governorate in 2020. At that time, the general manager of Sergaz undertook to modify the amount of rent, but without specifying a new figure, according to a release distributed to the press during the visit.

Link to statement

In 2022, Sergaz increased land rents from 0.4 dinars to 0.5 dinars, but this did not meet the aspirations of the landowners, who hoped for an increase to 12 dinars ($3.88) per square metre.

Concerning the criteria used for determining rental rates, the president and CEO of Sergaz, Moncef Matoussi, said “This was a matter for the court, which appointed experts who fixed the rental rate in 2021, at 500 millims ($0.16) and there is no possibility of changing this.”

The reporter asked for the document or report produced by these experts based on which the level of rent was determined. But the president and CEO of Sergaz said, “this document could only be handed over in response to a court order, because it was the sole preserve of the company management and could not be published.”

The reporter however has managed to obtain a copy of contract held by one of the landowners in the Meghdoudech region of Southern Kasserine district. This contract specified a payment of 292 dinars and 958 millims ($95) for an area of 58 square metres for ten years, ie. a pipeline passage rental fee of 500 millims per square metre per year.

Images of contract

The total cost of rents paid by Sergaz to the Tunisian state for the entire length of one pipeline (from Feriana to Haouaria) was 70 million dinars ($22.7 million), according to the president and chief executive officer (CEO) of Sergaz. This included 60 million dinars ($19.4 million) earmarked for landowners and 10 million dinars ($3.24 million) for the expenditure of the Tunisian Electricity and Gas Company.

However, a report by the Commission for Industry, Energy, Natural Resources, Infrastructure and Environment, on the draft law relating to approval of the agreement on managing the trans-Tunisian gas pipeline and related issues - No. 50 of 2019, regarding the rental cost of transporting capacity – states that the draft agreement includes the addition of an annual fee, estimated at $143 million dollars for a period of ten years, payable monthly to the Tunisian state in exchange for Eni’s exploitation of the pipeline’s capacity.

Eni meanwhile bears responsibility for the entire budget of the Trans-Tunisian Gas Pipeline Company (SOTUGAT) and the Sergaz service company.

Maintenance problems affect farmers

Mohammed Subhi, who lives in Southern Kasserine district and whose land is traversed by the two gas pipelines, complains that cracks have appeared in the walls of the house he built on this land. He blames the pipeline for this damage and that done to his well operating equipment.

Mohammed Subhi’s land is on a slope and the two pipelines have diverted the direction of water flow to the well which irrigates his land, and which he borrowed money from the bank to construct. The pipeline also caused large cracks in the ground through which waters seeped into the well operating equipment, damaging it and stopping it from pumping water. This caused his olive and almond trees to die.

Video of Mohammed Subhi

However, Noureddine Saeed, the official responsible for maintenance and safety in Sergaz, denies any threat or side effect to land or houses from the pipeline. He told us that maintenance teams are constantly monitoring the whole length of the pipeline and the pumping stations all the way from Feriana on the Algerian border to Haouaria on the coast.

On the question of tremors felt by local people on a regular basis, Saeed said these were caused by the installing of machinery to monitor the flow of gas and the thickness and integrity of the pipe. In his opinion, this machinery, while causing vibrations, poses no danger to residents. And he said that citizens were trying to obtain compensation payments from the company in any way they could.

Sergaz undertakes maintenance operations as part of its work and also oversees the operation and safety of the pipeline and protects it from any threat. According to the president and CEO, the budget set aside for maintenance amounts to 100 million dinars a year ($32.4 million) and includes the cost of maintenance and supplies, and the transport and operational costs involved in maintenance and monitoring.

Areas crossed by gas pipeline deprived of gas

The first station for monitoring gas pumping is situated in the Ouled Mazrouk area, part of Feriana administrative district, and Tarabya, in Majel Bel Abbes district (on the Tunisian-Algerian border), according to local people, in Kasserine Governorate – the point where the gas pipeline enters Tunisian territory. Majel Bel Abbes is one of the poorest regions in the country, and the fourth most deprived in the region, with a poverty rate of 41.40%, according to the most recent figures published by the Tunisian National Institute of Statistics in 2020, as part of its mapping of poverty in the country.

On 18 October 2021, a number of local people and unemployed youths began an open-ended sit-in outside the monitoring station , calling for social improvement and jobs. They also called for part of Sergaz profits to be spent on regional development projects and for homes to be connected to the gas network.

The residents of the districts of Majel Bel Abbes and Southern Kasserine, in Kasserine Governorate, through which the pipeline passes, are not connected to the domestic gas supply network.They are therefore forced to look for bottled gas during winter , a situation at odds with the fact that large amounts of natural gas pass through the province, but do not benefit its inhabitants.

According to the minutes of a meeting in 2015, between residents of Majel Bel Abbes and the former governor, Atef Boughattas, it was decided to set up a project to supply the city of Majel Bel Abbes with natural gas. But this is yet to happen (up to the time this report was published). While residents hold Sergaz responsible for this, the company CEO says that it is the responsibility of the Tunisian Electricity and Gas Company (STEG) to connect the towns and cities to the gas supply. He said that the delay was because of financial problems the company (STEG) was currently facing.

During our interview with the Tunisian Electricity and Gas Company (STEG) director in Kasserine region, Ferhani Hanainia, (to ask why some towns like Majel Bel Abbes had no natural gas, despite there being programmes and studies on this) he said that the cost of setting up a station, estimated at around four million dinars ($1.29 million) was excessive, given the small number of people in Majel Bel Abbes (no more than four or five) who had expressed the wish to have a natural gas connection service. This assertion is inconsistent with the number who signed the minutes of the meeting in 2015.

The company’s corporate social responsibilities (CSR): weak intervention in some areas and complete absence in others

During a visit to the province of Kasserine in 2021, Sergaz CEO Moncef Matoussi said in a press release that “for years prior to the issuing of the the law on corporate social social responsibilities the company had been proactive in its support of development in areas along the trans- Tunisian pipeline, and has set up sustainable development schemes in cooperation with the local and regional authorities.”

The same press statement explained that a second agreement had been made between the company and Kasserine Governorate for the years 2020 and 2021, that included supplying a number of areas on the route of the pipeline with natural gas and drinking water. The agreement covered various projects including drilling a deep well in the area of Majel Bel Abbes region, at a cost of around 300,000 dinars ($101,000), and another well in the region of Ouled Khlifa, costing some 200,000 dinars.

To find out if these schemes had been implemented, and how committed the company was to its corporate social responsibilities towards areas along the pipeline, we submitted a right to information request to the Department of Economic Affairs in Kasserine Province to obtain the minutes of the meetings dealing with agreements made by Sergaz and the province of Kasserine between 1979 and 2021.

We also obtained reports of loans earmarked by the company for Kasserine Province to fund projects including drilling of wells, connecting areas to the drinking water supply, and building security posts and schools.

The first of these, dated 29 March 2017, covers the creation of a deep well in the Ouled Mbarak area, at a cost of around 150,000 dinars, and connecting the village of Boukheil to the drinking water supply, at a cost of approximately 50,000 dinars.

The second report, issued on 26 September 2020, includes some of the same projects that appear in the first report, but with the addition of a scheme to drill a deep well to supply the Ouled Khlifa area, in Sbeitla district, with drinking water, at an estimated cost of 200,000 dinars. The two documents contain no projects for the Southern Kasserine region, which lies along the route of the gas pipeline.

When we asked the Sergaz CEO, why Southern Kasserine was not included in the areas to benefit from these projects or considered part of the company’s corporate social responsibilities (CSR), he said that the task of determining the needs of each region was shared jointly between the company and officials in Kasserine Province. As for the number of wells which had not yet entered the “usage phase”, even though they had been planned for years, the Sergaz CEO said that the company was responsible only for the drilling of wells, not the accompanying preparation and electrification work, which was the job of the Regional Commission for Agricultural Development (CRDA).

We contacted the Regional Commission for Agricultural Development (CRDA), whose responsibility covers drilling wells and monitoring the follow up work. The head of the regional water department, Munji Al-Sahli, said that the Ouled Mbarak well had been fitted out temporarily in 2022, and water tanks had been provided for people, but that it lacked a reservoir and electrification system, work which would cost about 30,000 dinars ($9,720) to carry out.

Tawfik Khleifi, a civil society activist from Ouled Khlifa, has staged several protests calling for drinking water to be supplied to local people, who currently drank polluted water that was a risk to health. He said: “We were happy to hear about the Sergaz projects, but not a single well has been drilled in our area. Instead, the focus of the projects has been moved to other places, with no reason given.”

We went with Tawfik Khleifi and a number of local people to the site of the well in the region of El Ghradeg and we saw the well that had been drilled in 2021, but which still had no machinery or electrical connection, and was therefore not being used to supply any water.

The head of the water department at the CRDA, said that the well had been drilled in El Ghradeg and that the necessary equipment would be arranged to bring water to Ouled Khlifa. He also referred to the “inadequacy of the local water table,” saying that a study had been prepared on equipment and electrification, and that the African Development Bank would fund the process of equipping and electrification.

Video documenting difficulties people of Ouled Khlifa face in obtaining water, the site of the well and how far project has got

Russia-Ukraine war has brought millions to the Tunisian state coffers but no benefit to farmers

Following the outbreak of the Russia-Ukraine war, which compelled the European Union to find alternative gas pipelines to those from Russia, the rate of Italian consumption of gas from Algeria increased. The Algerian petroleum company Sonatrach signed a memorandum of understanding with Italian company Eni in May 2022, to increase the supply of Algerian gas to Italy through the Transmed pipeline. The areas covered by the agreement were expected to produce three billion cubic metres per year.

This had a positive effect on the Tunisian state treasury. According to the president and CEO of Sergaz, the state collected a sum of $600 million during 2022, equivalent to two billion Tunisian dinars, while the state would normally receive between 500 and 600 million dinars ($162 to $195 million). Meanwhile, a report on the 2023 state budget indicates that income from the transit of Algerian gas had reached about 1,537 million Tunisian dinars by the end of October 2022. This increase, which went straight to the state treasury, has not been reflected in any increase in rental payments.

We have tried to contact departments in the Tunisian Ministry of Industry and Energy to ask why some of these profits have not been set aside for the benefit of farmers and landowners and used in development projects in areas through which the gas pipelines pass. But, despite repeated attempts, no one responded to our phone calls.

Up to the time of writing - June 2023 - Tawfiq Rahimi and a number of landowners, especially residents of the Southern Kasserine and Feriana districts, are still waiting to receive rental payments for their land. They have also said they reject the rental rate imposed on them by Sergaz.

Rahimi told us that members of the Landowners Association had written to President Kais Saied asking him to intervene directly to resolve this issue, but that no one had yet responded to their request.

This comes at a time when Eni has expressed its intention to terminate its involvement with Tunisia in exploration and production, because of the limited reserves in the country, according to Moncef Matoussi, CEO of SOTUGAT and Sergaz.

The Italian company Eni officially transferred 49.9% of its stake to the Snam Gas Group,on 10 January 2023. The two companies will jointly manage the transporting of gas through a new company called SeaCorridor, which will secure the process of bringing gas from Algeria to Italy going forward.