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    Sonatrach Eyes Foreign Investors for Shale Gas: CEO


Algeria has the potential for major shale gas production and has been selling the idea both to producers and to the local population, its CEO told NGW.

by: William Powell

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NGW Interview, Natural Gas & LNG News, Africa, Premium, Corporate, Exploration & Production, Shale Gas , News By Country, Algeria

Sonatrach Eyes Foreign Investors for Shale Gas: CEO

Sonatrach’s CEO Abdelmoumen Ould Kaddour told NGW that the company is seeking to expand its gas production and marketing, with LNG spearheading the growth in revenues.

Algeria already sells LNG to China, India, South Korea and Bangladesh, he said.

He said that the company was “working hard” to get ExxonMobil into Algeria to develop new acreage in the south of the country for unconventional gas. “It is one of the last of the big companies to be absent,” he said. Asked why the US supermajor should be tempted by Algeria rather than other African countries with a lot of gas, he said that Algeria has a long history of oil and gas and is revising its hydrocarbon law.

About half the country's gas production is exported, the rest used at home. But there is the potential to produce a lot more: Sonatrach's strategy has the ambitious goal of producing 20bn m³ from shale in 2030 and 70bn m³ in 2040.

“There are a lot of elements that make Algeria attractive,” he said, comparing it with the comparative inexperience of Mozambique or Angola. In the meantime, Algeria is still launching new projects, having brought on stream in the last few months four projects: TFT, Reggane Nord, Timimoun, and most recently Alrar, a 100% Sonatrach project.

After 14 months at the helm, he has produced a strategic plan, SH2030. This will cost $68bn more to implement between 2018 and the deadline year than the base scenario of $490bn, or another seventh.

It recognises that while Algeria has advantaged access to the European market and appreciable reserves and a highly trained workforce, on the other hand demand and prices are under pressure, the historic fields depleting and the regulations difficult. One aim is to sell half the gas in new markets and to add more value from trading abroad or in partnership. Another plan is to set up a petrochemicals business.

By law Sonatrach has to have at least 51% in any upstream project but the draft hydrocarbons law now allows that to be lower, meaning foreign entities could own over half.

Some of the gas will be liquefied and the country is planning to add two tankers to its existing fleet of 10, both of 170,000 m³ capacity – as were the last two. Liquefaction capacity is also being expanded: Arzew is being revamped so it will be able to produce at nameplate once more and a new train is to be added. Another plant at Skikda, which is also very old, has already had its upgrade.

Unconventionals are also going to play a part in Algeria’s gas renaissance, he said, dismissing past protests as history. He said Sonatrach had spent time with the local residents, not just explaining the facts of shale but also flying some of them out to fields in Argentina, Canada and the US so they can see for themselves what shale gas production means, and that “what they have heard is not true. We have the world’s third largest resource of shale, and there is no way we cannot produce that kind of volume. It would bring many benefits, it is very important, and create jobs for the local population,” he said.