Algeria’s energy sector to sustain growth in 2019

Image: Mundoaominuto

Algeria’s Prime Minister, Ahmed Ouyahia, is expected to focus on development’s in the country’s energy sector when he delivers the country’s general policy statement to parliament on February 25.

An early publication on the Prime Ministry’s website shows the document will focus, among others, the oil and gas exploration to power generation and renewable energy.

Algeria has seen a 13% decrease in oil production recently, due to upgrade works across a number of ageing fields, according to the document. Subsequently, Prime Minister Ouyahia will reveal national oil company (NOC) Sonatrach’s 2030 plan.

The country’s NOC has ambitious exploration goals and hopes to double its current discovery figures in just over ten years. In order to counter depleting hydrocarbon reserves, the company is implementing a strategy to increase revenue from refining activities, both locally and internationally, as well as widely developing the petrochemical industry.

A long awaited revision of the current oil and gas code is necessary to fuel this ambitious plan. The new law is currently under preparation and will increase the hydrocarbon sector’s attractiveness.

Renewable energy is also gaining traction in Algeria. 2017 was a big year for Prime Minister Ouyahia’s government, with 125MW of capacity installed across five plants. A bidding round was launched recently hoping to attract the local private sector to add 150MW of capacity to the grid. Another 150MW is currently being installed by public renewable energy companies. The current government’s goal is to produce 4,500MW through renewable energy in the next five years. At this stage, it is confident such a goal will be reached. Energy efficiency issues are also largely detailed in the statement featuring an objective of saving $42 billion by 2030, thanks to reduced consumption.

Meanwhile, in the last two years, 2,200MW of power have been installed in the north of the country, increasing capacity in Ain Djasser, Ain Arnat, Ras Djinet and Boutlelis plants. Further additions include 34MW in the “In Salah, Adrar, Timimoun” complex and 110MW through a number of smaller units, including mobile gas turbines, fuel plants and micro-plants. Power coverage will continue to build on solid results; in the last two years, 550,000 homes were electrified and 500,000 homes were connected to natural gas networks.

With presidential elections coming up in a couple of months, the energy sector policy is just one component of Prime Minister Ouyahia’s plan, which includes reinforcement of a number of strategic sectors such as industry, agriculture and tourism as well as key infrastructure development.