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* Islamists attack Algerian gas field
* Dozens of foreign hostages held, three killed
* Raid in retaliation for French intervention in Mali
* Gas field produces over a tenth of Algerian gas
By Lamine Chikhi
ALGIERS, Jan 16 (Reuters) - Islamist militants attacked agas field in Algeria on Wednesday, claiming to have kidnapped upto 41 foreigners including seven Americans in a dawn raid inretaliation for France's intervention in Mali, according toregional media reports.
The raiders were also reported to have killed three people,including a Briton and a French national.
An al Qaeda affiliated group said the raid had been carriedout because of Algeria's decision to allow France to use its airspace for attacks against Islamists in Mali, where French forceshave been in action against al Qaeda-linked militants since lastweek.
The attack in southern Algeria also raised fears that theFrench action in Mali could prompt further Islamist revengeattacks on Western targets in Africa, where al Qaeda in theIslamic Maghreb (AQIM) operates across borders in the Saharadesert, and in Europe.
AQIM said it had carried out Wednesday's raid on the InAmenas gas facility in OPEC member Algeria, Mauritania's ANInews agency reported.
The Algerian interior ministry said: "A terrorist group,heavily armed and using three vehicles, launched an attack thisWednesday at 5 a.m. against a Sonatrach base in Tigantourine,near In Amenas, about 100 km (60 miles) from the Algerian andLibyan border."
"The Algerian authorities will not respond to the demands ofthe terrorists and will not negotiate," Interior Minister DahoOuld Kablia was quoted as saying by official news agency APS.
The gas field is operated by a joint venture including BP, Norwegian oil firm Statoil and Algerian statecompany Sonatrach.
ARMED MEN
BP said armed men were still occupying facilities at the gasfield, which produces 9 billion cubic metres of gas ayear(160,000 barrels of oil equivalent per day), more than atenth of the country's overall gas output, and 60,000 barrels aday of condensate.
"The site was attacked and occupied by a group ofunidentified armed people at about 0500 UK time. Contact withthe site is extremely difficult, but we understand that armedindividuals are still occupying the In Amenas operations site,"it said.
A spokesman for BP said it usually had fewer than 20 peopleworking at the site but would not be drawn on whether there wereany talks with the hostage takers. He said: "Obviously we aredoing everything we can to make sure our people are okay."
APS said a Briton and an Algerian security guard had beenkilled and seven people were injured. A French national was alsokilled in the attack, a local source said.
Also among those reported kidnapped by various sources werefive Japanese nationals working for the Japanese engineeringfirm JGC Corp, a French national, an Austrian, anIrishman, and a number of Britons.
The U.S. State Department said it believed some U.S.citizens were also among the hostages, while Norwegian PrimeMinister Jens Stoltenberg said 13 employees of Statoil,a minority shareholder in the gas venture, were being held.
A member of an Islamist group styling itself the "BloodBattalion" was quoted by Mauritanian media as saying that fiveof the hostages were being held at the gas facility and 36 werein a housing area. APS said the Islamist raiders had freedAlgerians working at the gas facility, though Regis Arnoux, headof French company CIS Catering, told JDD weeklynewspaper that 150 Algerian employees of his company were beingheld at the site.
"The operation was in response to the blatant interferenceby Algeria and the opening of its air space to French aircraftto bomb northern Mali," the Islamist spokesman told Mauritania'sANI news agency.
ANI, which has regular direct contact with Islamists, saidthat fighters under the command of Mokhtar Belmokhtar wereholding the foreigners.
Interior Minister Kablia also told APS that Belmokhtar wasleading the group of about 20 individuals, whom he said were notfrom Mali, Libya or "any other neighbouring state".
Belmokhtar, dubbed by French intelligence as "theuncatchable", for years commanded al Qaeda fighters in theSahara before setting up his own armed Islamist group late lastyear after an apparent fallout with other militant leaders.
The Algerian army was in the area of the gas facility,according to French and Algerian sources.
ANI reported that the Islamists said they were surrounded byAlgerian forces and warned that any attempt to free the hostageswould lead to a "tragic end". One of the hostage takers told ANIthat the perimeter of the site had been mined.
SECURITY IMPLICATIONS
The attack was the first time in years that Islamistmilitants are known to have launched an attack on an Algerianenergy facility.
The attack could have implications for security across thewhole of Algeria's energy sector, which supplies about a quarterof Europe's natural gas imports and exports millions of barrelsof crude oil each year.
Such an attack would require a large and heavily armedinsurgent force with a degree of freedom to move around, allelements that al Qaeda has not previously had.
However, the conflict in neighbouring Libya in 2011 changedthe balance of force. Security experts say al Qaeda was able toobtain arms, including heavy weapons, from the looted arsenalsof former leader Muammar Gaddafi.
The five Japanese work for the engineering firm JGCCorporation, Jiji news agency reported, quoting companyofficials. JGC has a deal with Sonatrach-BP-Statoil Associationfor work in gas production at In Amenas.
A reporter for Japan's NHK television managed to call a JGCworker in Algeria.
The worker said he got a phone call from a colleague at thegas field. "It was around 6 a.m. this morning. He said that hehad been hearing gunshots for about 20 minutes. I wasn't able toget through to him since."
French troops launched their first ground operation againstIslamist rebels in Mali on Wednesday in an action to dislodgefrom a strategic town al Qaeda-linked fighters who have resistedsix days of air strikes.
