Libya’s Energy Future: Industry and Political risk outlook was launched at a Chatham House seminar in London on 20 July.
Based on African Energy’s unparalleled track record in following Libya’s energy story and careful, originally sourced reporting from Libya and global markets, this updated and enlarged special report analyses the major issues and the financial and political trends influencing development of Libya's energy industries. Read more
A detailed guide to electrification in Africa
A 400-page study published in Paris by Karthala, L’Electricité au Coeur des Défis Africains (available in French only) includes an overview of the continental electricity supply industry and examples of generation, transmission and distribution projects. A chapter on decentralised rural electrification is followed by another on the establishment of decentralised services companies.
The book draws on articles and materials from a number of experts and sources, including African Energy.
Order a copy now, priced €36 / £30 plus postage and packing. Email: nick@africa-energy.com
AfricaHardball is an executive dialogue that brings together policy-makers, industry leaders and analysts to discuss the key political issues affecting the African energy industry in frank and open terms.
The last AfricaHardball roundtable was held on 29 June, prior to the start of EnergyNet Ltd’s annual Africa Energy Forum (AEF), in Basel. Read more
ALGERIA: Arzew LNG EPC goes to Snamprogetti, Chiyoda
Low bidder Petrofac/IKPT has lost the Arzew LNG train contract to a joint venture of Italy’s Saipem/Snamprogetti and Japan’s Chiyoda. The E2.8bn ($4.4bn) engineering, procurement and construction contract is for a single train gas liquefaction plant, with a capacity of 4.7m t/yr, to be built near Arzew, about 400km west of Algiers. Work is due for completion by the end of 2012. After the commercial bid opening, Sonatrach gave Petrofac and Indonesia’s IKPT ten days to provide the relevant guarantees, including documents from process licensor APCI and machinery supplier General Electric/Nuovo Pignone. However, Sonatrach said these were insufficient, and the quoted construction price had risen from AD241bn ($4bn) to AD257bn.
Industry sources in Algiers noted that Petrofac was not regarded as a heavy-hitting IOC by influential figures such as Energy and Mines Minister Chakib Khelil, “who has always favoured the big names such as BP, Total and Shell.” Local analysts said that fast-growing Petrofac had not been as busy in Algeria as in some other countries. But it has been working: its main Algeria contract was for the In Amenas wet gas development project for In Salah Gas Company, which ran from 2004 to 2007. Last year In Salah gas awarded it another big EPC contract, for its South West District 3 development (AE 127/17).
Whatever the motive, the last-minute change ensures that the LNG project will remain mired in controversy, and possibly in lengthy legal wrangles. Bids for the contract were evaluated on a cost-per-tonne basis, with the Petrofac/IKPT bid of AD55,000/t ($900) confirmed as the lowest. Snamprogetti and Chiyoda bid AD61,000/t and Technip bid AD75,000/t.
The project is to be financed 100% by Sonatrach, and will take 50 months to complete. There is potential for an eventual second train. Gas for the plant will come from the Gassi Touil and Rhourde Nouss fields.
Sonatrach has moved quickly to get things moving again after it finally lost patience in September 2007 with Repsol YPF and Gas Natural on the Gassi Touil Integrated LNG deal, following numerous delays and misunderstandings. Industry insiders have suggested that the Spanish companies widely undercut their rivals when bidding for the project in 2004 by under-estimating the true costs, which subsequently spiralled (AE 121/24). The cancellation damaged relations between Sonatrach and its Spanish partners, and is now the subject of international arbitration. It was also a significant set-back to Sonatrach’s gas ambitions – the delay was one of the factors behind Sonatrach’s revision of its 85bn m3 gas export target from 2010 to 2012.
Work on the 4.5m t/yr Skikda LNG plant, another essential element, is progressing following the award of the contract to KBR last year. It has taken Sonatrach a long time to get this project off the ground, after serious damage to the plant in an explosion in 2004. Last month, KBR sub-contracted Egypt’s Orascom to carry out some of the construction work (AE 142/20). Start-up is scheduled for 2011.
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