UPDATE 1-Algeria says Transmed gas line capacity to increase

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ALGIERS, May 31 (Reuters) - The capacity of the Transmed pipeline linking Algeria to Italy will be increased by 7 billion cubic metres (bcm) a year by the end of this year from the current 27 bcm, Algeria's energy minister said on Sunday.

Efforts will also be undertaken to speed up completion of the Galsi project, a new gas link between Algeria and Italy, Energy and Mines Minister Chakib Khelil told a news conference.

Transmed, which runs from Algeria via Tunisia to the Italian island of Sicily, is the main route for supplying Algerian gas to Italy.

"We talked about the expansion of the Transmed pipeline. Its capacity will increase by 7 billion cubic metres by the end of this year," Khelil said after talks with Italian Economic Development Minister Claudio Scajola.

The Galsi pipeline, which is expected to supply Italy with 8 bcm/yr, was originally due to start operations by 2012 but officials have previously said this will be pushed back.

"We will try to accelerate things," on the Galsi project, Khelil said.

The project's partners include Algerian energy firm Sonatrach, Italian gas network Snam Rete Gas (SRG.MI: Quote, Profile, Research) as well as Italian utilities Edison (EDN.MI: Quote, Profile, Research), Enel (ENEI.MI: Quote, Profile, Research), and Hera (HRA.MI: Quote, Profile, Research).

Snam is controlled by Italy's biggest oil and gas group Eni (ENI.MI: Quote, Profile, Research).

"We will start works soon," Scajola, speaking through an interpreter at the same news conference, said about the project. "Galsi has become a strategic project for Europe. It's among European priorities." (Reporting by Hamid Ould Ahmed; Writing by Christian Lowe; Editing by Jon Hemming)