Several people were wounded when a bus was targeted as it carried workers from the facility, near In Amenas,
After being repelled, the militants travelled to the facility’s residential area, where they seized other workers.
Militants linked to al-Qaeda claim to have been behind the incident.
They initially said they were holding six people hostage. But an alleged spokesman later told two Mauritanian news websites they were holding 41 foreigners, including US, French, British and Japanese citizens.
Algeria’s state-run APS news agency, citing local officials, said “slightly more than 20” foreign nationals were being held. Algerian workers at the facility had been released in small groups, it added.
Norwegian public broadcaster NRK quoted the oil company Statoil as saying there had been 17 personnel in total, including 13 Norwegians, at the gas facility when it was taken over by the militants.
The In Amenas gas field is operated by the Algerian state oil company, Sonatrach, along with Statoil and the British oil company BP. It is about 1,300 km (800 miles) south-east of the capital, Algiers, and about 60 km west of the Libyan border.
The attack came after militants vowed to avenge France’s military intervention in Mali, where its forces have been battling Islamists linked to Al-Qaeda in the Islamic Maghreb (AQIM) for the past week. Algeria has been allowing French aircraft to use its air space.
The Algerian interior ministry said a heavily-armed “terrorist group” using three vehicles had attacked the bus carrying workers from the In Amenas gas field at about 05:00.
The attack was “repelled by the escort units”, but one foreign national was killed and six people – two foreigners, two police and two security personnel – were wounded, a statement said.
“After their failed attempt, the terrorist group headed to the complex’s living quarters and took a number of workers with foreign nationalities hostage,” the ministry added.
“The forces of the People’s National Army and security services arrived at the scene and immediately took all necessary measures to make the area secure and seek a rapid resolution of the situation, which is being very closely followed by the national authorities.”
Later, the APS news agency cited local officials as saying two foreigners had been killed in the attack, one of them a British national. A local source earlier told the Reuters news agency a Frenchman had died.
The UK government confirmed that “several British nationals” had been involved in a “terrorist incident”.
Irish Foreign Minister Eamon Gilmore said one of its nationals had been abducted, adding that his government was “ready to use all the resources available to us to ensure that our citizen is released as soon as possible”.
A Japanese contractor at the In Amenas gas facility, JGC Corp, confirmed that Japanese staff had been seized, according to Japanese media.
The wife of a Norwegian gas worker was quoted as saying by the Bergens Tidende newspaper as saying: “I received a phone call from my husband this morning and he said he had been kidnapped.”
BP confirmed that there had been a “security incident”.
“The site was attacked and occupied by a group of unidentified armed people,” a statement said.
“Contact with the site is extremely difficult, but we understand that armed individuals are still occupying the In Amenas operations site.”
A man claiming to be a spokesman for the militants said al-Qaeda had carried out the attack.
He claimed that they had allowed Algerian workers to leave the gas facility and were only holding foreign nationals.
A list of demands had been sent to the Algerian authorities, and the hostages would be killed if troops attempted to rescue them, the spokesman added.
”Storming the gas complex would be easy for the Algerian military, but the outcome of such an operation would be disastrous,” he warned.
Earlier, a group known as the Khaled Abu al-Abbas Brigade told the AFP news agency that it had kidnapped the workers.
The Khaled Abu al-Abbas Brigade is believed to be led by Mokhtar Belmokhtar – also known as Abu al-Abbas – who was a senior commander of al-Qaeda in the Islamic Maghreb before late last year, when he set up his own armed group after apparently falling out with other leaders.
His new group is also known as the Signed-in Blood Battalion, a spokesman for whom told the Mauritanian Sahara Media website that it had “captured 41 Westerners, including seven Americans, two French citizens, two British citizens and two Japanese”.
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