Algeria must maintain momentum on energy projects

The Algerian oil and gas projects market in 2009 is a significantly different beast from that of one year earlier. In 2008, as contractors flocked to countries such as Saudi Arabia to bid on megaprojects valued in the tens of billions of dollars, the North African state seemed to be lagging behind.

Lumbered with complex bureaucracy and tough contracting terms, the country's projects market effectively ground to a halt. Cut to the second quarter of 2009, however, and ambitious schemes are being pushed through rapidly.

Contractors are anticipating major new oil and gas field developments in the south of the country with great interest.

Just as essential to Algiers' vision of its future as a major oil and gas producer and exporter is the upgrade to its existing hydro-carbons distribution network.

In May, firms entered bids on the early stages of a $5bn-plus project, the GK3 pipeline. This will link the central Hassi R'Mel distribution hub with sites across the north of Algeria, including the El-Kala port, which is key to another, even larger project to send gas to Italy.

The multi-billion-dollar Galsi pipeline scheme will transport gas to Italy by 2012. In addition to the Medgaz pipeline linking Algeria with Spain, an upgrade to an existing Algerian-Italian pipeline and the new Galsi pipeline will cement the country's status as a major supplier of natural gas to Europe.

Pipeline schemes worth several billion dollars more are due to be tendered in the coming year, including the GZ4 pipeline linking Hassi R'Mel and Beni Saf on the northwest coast, boosting supplies to Medgaz.

With project costs coming down, Algiers' newfound appetite for pushing schemes through quickly could work to the advantage of all concerned.