Sonelgaz In Talks With Foreign Lenders

The CEO of Algerian state utility Sonelgaz, Noureddine Bouterfa, announced on June 5 in Algiers that he is negotiating loans with foreign creditors in order to fund Sonelgaz's investments, reported state news agency APS. Its article can be accessed here.

Low revenues generated a deficit in 2015 of dinars 98bn, he said ($883mn at today's exchange rate), principally on distributing gas and power.

In April, state oil and gas producer Sonatrach and distributor Sonelgaz acknowledged they need international financing, with Sonelgaz entering talks with the African Development Bank about possible financing of its renewable energy projects.

Sonelgaz CEO Noureddine Bouterfa (Photo credit: portail.cder.dz )

An Oxford Institute for Energy Studies analysis by a top Algerian energy official of the 1990s argued that, with current gas wholesale prices at $0.50/mn Btu in Algeria, prices paid by gas consumers locally are far too low – and need to be raised in order to avert runaway domestic consumption. State producer Sonatrach buys all gas produced inside the country, including from joint venture projects, but the transfer price paid to its foreign partners is having to rise in line with the higher marginal cost of production on more difficult fields. Sonatrach supplies Sonelgaz for the domestic market.

Meanwhile, it has been announced that the 15th International Energy Forum (IEF15) will be held in Algiers from September 26-28, 2016, hosted by the Algerian government. The last such consumer-producer dialogue forum (IEF14) was held in Moscow on May 15-16, 2014.

Mark Smedley