Algeria’s Tiguentourine gas plant back at full capacity
Tunis - Algeria has brought back to full capacity one of its main gas plants damaged in a January 2013 jihadist attack, the oil and gas state firm Sonatrach announced.
“The Tiguentourine gas complex is fully back online after repair of the third processing train at the plant and the tests of security and safety measures have been successfully passed on July 27th,” the company said.
Two other damaged processing trains had been repaired earlier, it added.
The plant is 1,600km south-east of Algiers, near the border with Libya. It is operated in a partnership among Algerian Sonatrach, BP and Statoil.
The increase in productivity at Tiguentourine, which used to supply more than 10% of Algeria’s natural gas, is a boost at a time when the Organisation of the Petroleum Exporting Countries (OPEC) member is struggling to adapt to changing gas market conditions.
The Tiguentourine plant, built in 2006 at a cost of $2 billion, is part of several Algerian gas projects, mostly in the Sahara south-eastern areas, aimed at boosting output and maintaining gas exports to Europe to offset dropping production in old fields and competition from resurgent gas producers, such as Qatar and the United States.
Al-Qaeda’s North Africa affiliate attacked the facility in January 2013 after infiltrating Algeria from Libya. The assailants took dozens of workers, including foreign employees, hostage.
The stand-off ended several days later when Algerian troops battled the terrorists at the plant. Thirty-seven hostages and 29 assailants were killed.
Gas exports account for almost half of Algeria’s total hydrocarbon exports, which make up 95% of the country’s foreign currency revenue.
Algeria has a network of pipelines under the Mediterranean across neighbouring Tunisia and Morocco to ship gas to Europe. It also has a multibillion-dollar project to develop solar energy to provide electricity and help it spare gas capacity for export.
“The gas represents between 40% and 50% of oil and gas total revenues,” Sonatrach’s former exploration chief Said Bagloul said. “While the prices of exported gas declined, our gas exports diminished in volume as we used to export 60 billion cubic metres of gas in the previous decade, the levels of gas sales abroad fell to around 50 billion [cubic metres].”
Algeria is selling gas at up to $11 per million British thermal units (mmBtu) compared to market prices averaging $7 mmBtu because it had long-term deals with its European partners.
“The prices are not an issue now for Algeria. They will become a problem when its long-term contracts end by 2018 and 2019 and European clients will ask to revisit these deals,” Bagloul said.
As a result of the competition from other gas producers, Algeria’s gas share in the markets shrank.
“During the 1970s and the 1980s Algeria’s gas share in Europe was 16%. It slumped to 12% at present and it could fall further because of the competition but it has advantages it can use compared to gas exports from Qatar, USA and Australia,” added Bagloul, citing pipelines and proximity to European markets.