CONSTRUCTION BEGAN ON THE FIRST stage of the Medgaz pipeline from Algeria to Spain on March 9, 2008. The Medgaz consortium includes Algeria’s state-owned Sonatrach with a 36% stake, Cepsa and Iberdrola SA with 20% each and Endesa SA and Gas de France with 12% each. Despite a number of disputes in the second half of 2007, Algeria and Spain eventually agreed on the amount of gas Sonatrach may sell through the Medgaz pipeline. Spain agreed to allow Sonatrach to sell more than 1 billion cubic metres of natural gas through the pipeline and dropped five of the seven conditions for Sonatrach to increase its stake in the Medgaz project from 20% to 36%. The pipeline is expected to transport at least eight ( 8) billion cubic metres of gas per year to Europe beginning in 2009.