North Africa can compete on gas

23 May 2008

A quiet revolution is taking place as Tripoli and Algiers develop plans to increase their hydrocarbons output.

It is usually the Gulf that takes the spotlight when it comes to boosting crude and gas output to feed the world’s thirst for energy.

But in North Africa, a quiet revolution is taking place as Tripoli and Algiers develop their own plans to increase their hydrocarbons output. Algeria, in particular, has re-emerged as a force to be reckoned with in the global gas market.

Since the start of the oil boom in 2003, Algiers has focused on paying its foreign debt before making domestic investments. With that achieved, its attention is now turning to the gas sector as it seeks to ramp up capacity and benefit from rising prices.

There is no shortage of funds to do this. Algiers has amassed more than $75bn in foreign currency reserves over the past five years.

The construction of a new 4 million-tonne-a-year liquefied natural gas (LNG) train at Arzew will boost the country’s LNG export capacity by more than 20 per cent, potentially allowing it to overtake Indonesia and Malaysia to become the world’s second-largest LNG exporter after Qatar.

Dry gas exports are also growing, with the construction of a sub-sea pipeline to Spain and plans for a another pipeline to Italy.

In a world where gas supplies are increasingly constrained, Algeria’s gas initiative could not have come at a better time. The spotlight could soon be shared far more equally between North Africa and the Gulf.

News: Algiers plans $10bn extension to midstream pipeline network

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