Search results

A consortium of South Korea’s Hyundai Engineering & Construction and Posco International signed a contract on 14 January to build the 1,300MW Umashe combined-cycle power plant in Biskra province. The $730m contract was signed with the Hyenco joint venture of Hyundai and Sonelgaz and work is expected to take 60 months. The power plant will have an average power generation capacity of 968m MWh/yr.

Major IOCs have underlined their business-as-usual approach in Algeria as both Italy’s Edison and France’s Engie announced on 19 November that they were renewing their strategically important long-term gas contracts. They join Italy’s Enel and Eni, Portugal’s Galp Energia, Turkey’s Botas Petroleum Pipeline Corporation and Spain’s Naturgy Energy Group (formerly Gas Natural Fenosa) in agreeing new long-term sales deals.This is a major imperative for Algiers, which depends on natural gas sales – which totalled 51.4bcm in 2018, when two-thirds went to Italy and Spain – for a large proportion of its total export revenues.

Algeria’s lower house of parliament on 14 November approved the long-awaited – but hotly contested – revised hydrocarbons law, in the run-up to a presidential election announced for 12 December by interim president Abdelkader Bensalah. IOCs welcome the changes but will proceed with caution because Algeria remains a tough place to do business.

Promoted from the ranks to lead the company he originally joined in 1984, Sonatrach chairman and chief executive Rachid Hachichi is struggling to convince Algerians their state energy giant can overcome corruption and win investment without compromising national interests. With politics still in ferment, a weak interim government hopes to pass a revised hydrocarbons law as soon as 15 November – before controversial presidential elections are held on 12 December.

The Commission de Régulation de l’Electricité et du Gaz (Creg) has awarded only one of seven solar PV projects tendered in June 2018. The 50MW project in Diffel, Biskra region, was awarded to the Power Generation consortium, which is majority owned by Algerian manufacturer Condor. The Ministry of Energy approved two tenders for the deployment of 200MW of solar PV capacity in June 2018.

The Algeria Press Service on 20 October quoted Sonelgaz chairman and chief executive Boulakhras Chahar as saying that contracts have been signed for the construction of nine solar plants intended to hybridise isolated diesel plants in the south of the country. Chahar said the technology would reduce diesel consumption by 30-40%. He said construction had been launched on 21 solar PV plants in 14 provinces in southern Algeria.

Sonatrach and Spain’s Naturgy have agreed to buy Abu Dhabi sovereign wealth fund Mubadala’s 42.09% stake in the Medgaz pipeline between Algeria and Spain. The transaction will mean that Sonatrach has 51% and Naturgy 49% of the pipeline, with a shareholder agreement giving them joint control. Sonatrach is already Spain’s biggest gas supplier by volume and Naturgy’s fourth largest shareholder with a 4% stake. A €67m ($75m) expansion of the Medgaz pipeline to increase capacity by 2bcm to 10bcm is due to be operational in 2021.

ExxonMobil signed an agreement with regulator Agence Nationale pour la Valorisation des Ressources en Hydrocarbures (Alnaft) on 29 September to participate in a study assessing the hydrocarbon potential of basins in the Algerian Sahara. Exxon has been looking at opportunities in Algeria for some time, and had been in talks with Sonatrach to develop a field in the south-western Ahnet Basin, but talks stalled in March 2019 following protests against former president Abdelaziz Bouteflika.

Neptune Energy and Sonatrach on 7 September announced the start of exports from the 450mcf/d (75,000 boe/d) Touat gas development. Located around 1,400km south-west of Algiers and close to Adrar, the development comprises 19 wells and a gas treatment plant for gas and stabilised condensate, with a gathering network and export pipelines.Production started in February as part of the commissioning process.

Key upstream partners are making bullish noises about their Algerian operations, but a call by judicial authorities to reopen investigations into historic accusations of malfeasance at state energy giant Sonatrach threatens to undermine confidence (see View). Italian major Eni has been anxious to secure long-term contracts and reiterate its commitment to Algerian business after ex-president Abdelaziz Bouteflika left office. Gas supply deals were signed in June with Portuguese buyer Galp and Sonatrach’s largest Italian client, Enel.

The Algerian national football team’s first Africa Cup of Nations victory for 27 years fed a renewed sense of national pride, which has soared since 22 February following anti-government protests that led to president Abdelaziz Bouteflika’s resignation and have maintained pressure on a weak government manipulated by ambitious military strongman Lieutenant General Ahmed Gaïd Salah. At the Cairo final, the interim president, Abdelkader Bensalah, represented a nation that does not want him to continue in office.

Sonatrach and Portuguese buyer Galp on 11 June signed agreements to continue the supply of 2.5bcm/yr of Algerian natural gas for another ten years. The deal was seen as a boost to Algeria’s under-pressure European take-or-pay supply contracts, continuing a sales agreement first signed in 1994.The Portuguese agreement follows the finalisation of a new long-term supply deal with Eni in May. Running to 2027, this was one of the last deals negotiated by Abdelmoumen Ould Kaddour before his sacking in April following the overthrow of ex-president Abdelaziz Bouteflika.

The Electricity and Gas Regulation Commission (Creg) has received only eight technical proposals from seven companies or groups for its much-anticipated tender for 150MW of solar photovoltaic (PV) independent power plants in southern Algeria. Four bids were accepted and their financial offers, which had previously been submitted but not opened, will now be assessed before a public tender opening at a so far unspecified date.

The announcement by interim President Abdelkader Bensalah that Algeria will not, after all, hold a presidential election on 4 July points to many more months of political unpredictability. Protests remain largely peaceful, but there is a growing prospect of turmoil as a ruling elite led by deputy defence minister and army chief of staff Lieutenant General Ahmed Gaïd Salah seeks to outflank a popular protest movement whose leadership remains defined by its anonymity.

Abdelmoumen Ould Kaddour was dismissed as head of state energy giant Sonatrach on 23 April, to be replaced by head of production Rachid Hachichi. Respected as an industry professional but widely distrusted for his links to the now discredited Bouteflika clan, and especially his ties to the politically ambitious former energy minister Chakib Khelil, Ould Kaddour’s position was in doubt even before Abdelaziz Bouteflika departed the presidency.