Medgaz success is the exception for Algeria's energy industry

15 January 2010

Those running Algeria’s energy industry also need to accept some of the blame for the failures

In March, gas could start flowing through the Medgaz pipeline from Algeria to Spain, just three months later than planned.

The opening of the project, which will supply Spain with up to 8 billion cubic metres of gas a year, is the best news Algeria’s energy sector has had in some time. The story in Algeria in recent years has more often been one of unmet promises and missed deadlines.

Five years ago, Energy Minister Chakib -Khelil said Algeria wanted to increase its gas export capacity from 60 billion cubic metres a year to 85 billion cubic metres by 2010. Yet last year, gas exports were still only 59 billion cubic metres.

The collapse of global demand for gas partly accounts for this failure, but those running the country’s energy industry also need to accept some blame. Of the planned projects - which include the Medgaz, Galsi and Transmed pipelines, and liquefied natural gas (LNG) facilities at Skikda and Arzew - only Medgaz and Transmed are close to hitting their deadlines.

The Skikda LNG project, originally due to start pumping gas in November 2009, will now come on stream in 2012, while the Arzew start-up date has been pushed back from 2010 to 2013. But it is not certain that even these revised deadlines will be met.

The relative success of the Medgaz project cannot disguise the wider failures. For now, Algiers’ ambitious targets still look well beyond its capabilities.

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