ALGERIA - Local Consumption.Algeria's consumption of natural gas this year is expected to exceed 22 BCM BCM Baylor College of Medicine
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BCM Business Contact Manager (Microsoft) , i.e., over 20m t/y of oil equivalent, while oil use will be limited to a little over 200,000 b/d (8.8m t/y). To compare, the country's gas consumption in 1975 amounted to 2.31 BCM.
Gas consumption is expected to rise considerably during this decade as the National Energy Council, headed by the president of the republic, has adopted a plan to promote gas utilisation in the rural areas and in various uses in the urban centres.
Algeria also consumes about 600,000 t/y of oil equivalent of coal, a rate maintained through the 1990s. Production and consumption of hydro-power have declined from 200,000 t/yoe in 1991 to a negligible volume. Total energy consumption has risen from 25.3m t/yoe in 1991 to 29m t/yoe.
The Gas & Power Markets: About two-thirds of the country's gas consumption go to power generation. For the local gas and power markets, the state-owned gas/power utility Socit Nationale de l'Electricit et du Gaz (Sonelgaz) and the state petroleum concern Sonatrach are being de-monopolised under a new gas and power law which came into effect in January 2002. Sonelgaz will be partly privatised.
Under the law, the two companies were given a three-year respite during which an independent Electricity & Gas Regulatory Commission (CREG) will be set up. This will ensure competition, transparency and free access to the power and gas networks, and enforce technical and environmental standards. Foreign and local companies are being invited to build independent power producing ventures (IPPs) and distribution systems. There will also be independent gas marketing ventures in Algeria during this decade.
These markets will also be overseen by two other bodies: a system operator for power generation and transmission, and a market operator for whole-sale. Until the three bodies are created, Sonelgaz will fulfill these functions. Private companies will be allowed to build and operate power plants under a licencing regime run by CREG.
The law called for the opening up of 30% market share within three years. Cross-border power trading will be opened to all participants. The law ensures transparent and non-discriminatory third party access to the transmission grid, with rules of access and pricing to be set by CREG. Distribution will be opened to franchises, to be licenced by the state. Their commitments will include a number of public service obligations. Rural areas are already well served, with Sonelgaz claiming 98% electrifi-cation. But only 33% of Algeria is connected to the gas supply network.
The Ministry of Mines and Energy in May 2002 adopted a plan to 2004 for development of the public gas supply system, in order to improve its efficiency and increase transparency. At the same time, it changed the terms of finance for public gas distribution. Finance for the propane transport network and related service stations was to be borne by the state. Finance of up to 50% for the distribution networks was to be provided by the government and Sonelgaz. Households receiving gas from the network were to pay 10,000 dinars ($130) per household. Under the previous legislation, households had been required to pay up to 20% of the costs in the north of Algeria and 10% in the south. The financing changes were to speed up completion of the public gas distribution programme.
Of domestic gas sales, about 85% goes to Sonelgaz. In late 1995, Sonelgaz signed a 30-year contract with Sonatrach to supply the utility with all its gas requirements at prices subsidised by the state and reviewed periodically. Oil use is limited by the shift to natural gas. In 1991 and 1992 local oil consumption averaged about 210,000 b/d, falling to 198,300 b/d in 1995. It rose to 200,000 b/d in the past three years.
To curb domestic oil consumption, long-term measures were initiated in 1984. To increase the share of gas in the consumption mix, the government introduced a new system of tariffs, distribution networks, and more gas consuming industries. In the transportation sector, for example, it launched an experiment to encourage the use of propane and compressed natural gas Compressed Natural Gas (CNG) is a substitute for gasoline (petrol) or diesel fuel. It is considered to be an environmentally "clean" alternative to those fuels. It is made by compressing natural gas (which is mainly composed by methane (CH4 (CNG CNG Compressed Natural Gas
CNG Calling (Tone)
CNG Comfort Noise Generation
CNG Cryptography Next Generation (Microsoft Windows Vista)
CNG Centre National de Génotypage ) by heavy transport. In April 1995, it increased the price of petrol for car users by 8-10% in another move to cut back on oil consumption. Further price rises were effected in the subsequent years.
In an interview with Petroleum Argus Argus Media Ltd (formerly known as Petroleum Argus Ltd) is a leading independent provider of price information, market data and business intelligence for the global petroleum, natural gas, electricity and coal industries. published on Feb. 5, 2001, Algeria's Mines & Energy Minister Chakib Khalil (who now is also CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Sonatrach), said this on the timing of deregulation Deregulation
The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.
Traditional areas that have been deregulated are the telephone and airline industries. : "We forecast five years for the hydrocarbon and (oil) products markets, and 10 years for the domestic gas market. We will open up gasline and pipeline building too because the present law doesn't allow this. Under the new law it will be allowed, but it will be regulated since these are monopoly activities, what we call 'natural monopolies'. We will continue to regulate them, and we'll regulate Sonatrach activities in transport and new activities from private companies in transport. Just as we do with electricity".
The Power Sector: The power generating capacity in Algeria has reached around 6,300 MW and should exceed 11,000 MW by 2010. Most of the increase in generating capacity will involve IPPs, with Sonatrach also branching into the power business. Around 95% of the current capacity is provided by gas-fired plants.
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Sonelgaz, demand for electricity in Algeria is growing at a rate of about 5% per annum Per annum
Yearly. . Power demand is getting close to installed capacity and should rise to 9,300 MW by 2010, compared to about 5,447 MW in 1996. Sonelgaz also exports power to Morocco. Sonelgaz will continue to exist as a holding company. It will be transformed into a joint stock company in which the state will maintain and majority shareholding, and local and foreign investors will be able to buy into a 30% stake.
Once reformed, Sonelgaz will have several divisions. One new subsidiary will own and operate the power transmission system. Another, SO-Gas, will be responsible for gas transmission. The new wholesale system, intended to match offers from generators and gas suppliers with demand from a range of buyers, will be run by a "market operator" company for the power sector and by an entity to be created within So-Gas for the local gas market.
The privatisation of Sonelgaz will help it raise funds to finance a $10 bn power investment programme in the coming years. Of this $5.4 bn would go to generation, $2.1 bn will be spent on transmission, and $2.5 bn will be invested in improving and expanding the distribution system. (Under a plan for 1996-2000, the power sector received $15.5ybn in total investment, mostly to revamp and upgrade existing facilities - see Vol. 56).
In late 1997, Sonelgaz converted nine of its subsidiaries into autonomous companies pending their privatisation. These include a transformer repair company, a print shop and vehicle repair firms. Client management is to be restructured completely with the decentralisation n. 1. same as decentralization.
Noun 1. decentralisation - the spread of power away from the center to local branches or governments
spreading, spread - act of extending over a wider scope or expanse of space or time of billing and the development of a network of 200 agencies open to the public.
Sonelgaz has been trying to become self-sufficient financially. It is to raise the power tariffs to cover costs. It began raising the tariff gradually in 1994. It is also to become more tough towards clients failing to pay their bill on time, like the state water utilities and other public services Public services is a term usually used to mean services provided by government to its citizens, either directly (through the public sector) or by financing private provision of services. . Already Sonelgaz cuts clients off if they do not pay within two weeks. To become profitable, eventually, Sonelgaz will have to raise power and gas tariffs to international market levels in line with IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). policy.
On May 23, 2001, Sonatrach and Sonelgaz established a 50/50 venture called Algerian Energy Co. (AEC AEC US Atomic Energy Commission
Noun 1. AEC - a former executive agency (from 1946 to 1974) that was responsible for research into atomic energy and its peacetime uses in the United States
Atomic Energy Commission ) to invest locally and abroad in power generat-ion, transmission and distribution, and the transport and distribution of gas. With an initial capital of AD 250m ($2.5m), it plans to sell power to the local market, the neighbouring countries and southern Europe Southern Europe or sometimes Mediterranean Europe is a region of the European continent. There is no clear definition of the term which can vary depending on whether geographic, cultural, linguistic or historical factors are taken into account. . AEC's main project is to have a 2,000 MW capacity - with an 800 MW plant to be built at Skikda for the local market, and a 1,200 MW plant to be built at Arzew for export. AEC intends to bring in Western partners.
Red Electrica of Spain, which operates a marine cable system under the Strait of Gibraltar Noun 1. Strait of Gibraltar - the strait between Spain and Africa
Pillars of Hercules - the two promontories at the eastern end of the Strait of Gibraltar; according to legend they were formed by Hercules connecting the power grids of Morocco and Spain, in November 2001 signed a protocol with Sonelgaz to jointly run a similar cable between Algeria and the Spanish market. This will run along a marine gas pipeline to be built from Marsat Ben M'Hidi in Algeria to the Almeria region in Spain. In December 2001, Sonelgaz signed an agreement with the Italian network operator Gestore della Rete di Trasmissione Nazionale (GRTN GRTN Gestore Rete Trasmissione Nazionale (Italian: National Transmission Network Operator; electric power industry, Italy) ) to jointly operate a marine cable that will run along a new gas pipeline to be built to Italy through Sardinia.
The Kahrama venture between AEC (20%) and Kansas-based Black & Veatch (80%) has the country's first independent water desalination Water desalination
The removal of dissolved minerals (including salts) from seawater or brackish water. This may occur naturally as part of the hydrologic cycle, or as an engineered process. and power project (IWPP IWPP Independent Water and Power Production
IWPP Industrial Waste & Pollution Prevention (Metropolitan Council Environmental Services; Minnesota) ) in Arzew close to the GL2Z gas liquefaction liquefaction, change of a substance from the solid or the gaseous state to the liquid state. Since the different states of matter correspond to different amounts of energy of the molecules making up the substance, energy in the form of heat must either be supplied to complex. This will have a $400m, 314 MW and 88,000 CM/d plant built by a Japanese partnership of Itochu and Ishikawajima-Harima Heavy Industries under a $260m EPC (1) (Entertainment PC) See HTPC.
(2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). contract signed in early 2002. Completion was set to be within 24-27 months. GE Power Systems will provide the gas turbines. With Mizuho Financial Group Mizuho Financial Group, Inc. (株式会社みずほフィナンシャルグループ acting as financial adviser for Kahrama, the Japan Bank for International Co-operation and Coface of France have been approached to provide export credits. Sogex Oman was in late 2002 negotiating the contract to operate and maintain the plant as well as provide day-to-day management. AEC will supply the plant with gas and will buy the power output under 25-year take-or-pay contracts. Under another 25-year contract, with a 100% take-or-pay clause, Sonatrach will buy the water output for use in the Oran region which is acutely short of water.
In March 2001 AEC signed an agreement with Enelpower, a unit of Italian power utility Enel, on co-operation in power generation, transmission and distribution as well as in gas marketing in Algeria and abroad. Under a 12-month Sonelgaz contract signed in late 2001, Enelpower has erected 410 km of high-tension power transmission lines in two sections, one between Touggourt and Biskra and the second from the Hassi Ameur power plant to the Moroccan border.
A 400 MW gas-fired two-turbine combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. plant at Hamma, a coastal suburb of Algiers, was built for Sonelgaz by Ansaldo Energia Ansaldo Energia, a śubsidiary of Finmeccanica, is an Italian power company, with an experience of more than a hundred years. Ansaldo Energia covers the entire power generation spectrum with a combination of plant engineering, manufacturing and service activities. , which also built a 220-kV substation, under a contract signed in March 1999. The first turbine was commissioned in January 2002 and the second started up in June. This $150m project was partly financed by soft loans from Kuwait-based Arab Fund for Economic and Social Development The Arab Fund for Economic and Social Development, or AFESD, is a Kuwait based, pan-Arab development finance institute. All members of the League of Arab States are members of the fund. As of 2003, it held around U.S. $7.3 billion in assets. (AFESD AFESD Arab Fund for Economic & Social Development
AFESD Air Force Electronic Systems Division - $100m), the Saudi Fund for Development ($22m) and the Jeddah-based Islamic Development Bank Islamic Development Bank (also known as IDB), is a multilateral development financing institution. located in Jeddah, Saudi Arabia. It was founded by the first conference of Finance Ministers of the Organization of the Islamic Conference (OIC), convened 18 December 1973. (IDB (ITS Data Bus) An interface between devices in an automobile endorsed by the Society of Automotive Engineers (SAE). Designed to fulfill the goal of Intelligent Transportation Systems (ITS), the ITS Data Bus enables engine diagnostic equipment, GPS navigation systems, - ($20m). The plant meets additional demand in the region and replaced an earlier proposal to build two 300 MW units at Ras Djinet.
AEC is having a 200,000 CM/d water desalination project to be built within the Hamma power complex to meet severe water shortages in Algiers. This is an IWP IWP International Writing Program (University of Iowa)
IWP Institute of World Politics
IWP Ice Water Path
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IWP Iraq Water Project
IWP Idaho White Pine (lumber) , with AEC and state-owned Algerienne des Eaux to take a 30% equity each. The remaining stake will be held by a foreign company. The bidders for the stake and EPC contract have included Ansaldo Energia and a US-Spanish consortium including Black & Veatch.
Several new IPP (Internet Printing Protocol) A protocol for printing and managing print jobs over the Internet using HTTP. Initially conceived by Novell, Xerox and others, the IETF made it a standard in 2000 that includes authentication and encryption. See printing protocol and LPD. projects announced in 1998 have been transferred to AEC control. In 1999 Electricite de France (EdF) completed a pre-feasibility study for a 1,200 MW combined cycle power plant at Hadjret En Nouss, about 80 km west of Algiers along the Mediterranean coast, near Tipasa. But the project is still in the drawing board. Two 600 MW IPPs at Terga and Koudiat Draouch were still in the pre-feasibility phase in 2002. Also delayed is a 1,200 MW CC plant at Jijel, to be known as Jijel-2, scheduled for completion in 2009/10. It will consist of two 600 MW units.
A 300 MW gas-fired plant at Hassi Messaoud Hassi Messaoud (häs`sē mĕs'säd`) [Arab.,=blessed well], town, E Algeria. came on stream in 1999 and was built by Nuovo Pignone under a contract awarded in 1995. The $286m project was partly funded by AFESD and IDB. A 200 MW gas-fired plant at Ain M'Lila built for Sonelgaz came on stream in 2002.
A 330 MW gas-fired plant in the petroleum-rich Hassi Berkine region being built for Sonatrach is the country's first privately financed project partly completed. The first 110 MW unit went on stream in 2001, and the $107m EPC contract for this was given to Nuovo Pignone (of Italy which is majority owned by General Electric of the US). Finance has been provided by the local oil-producing operators - Anadarko of the US, Agip of Italy and Cepsa of Spain - which are buying the electricity from Sonatrach (see Gas Market Trends No. 6).
Other power projects in Algeria include: a 300 MW gas-fired plant at Hassi Messaoud to be on stream in 2005/08 and to consist of three 100 MW units; a 200+100 MW gas-fired plant at Tilghemt to be on stream in 2007/08; a 200 MW gas-fired plant at M'Sila to be on stream in 2008.
On Dec. 7, 2000, Sonatrach and Conoco of the US signed a partnership agreement to do a feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. for a proposed integrated gas-to-power (GTP GTP (guanosine triphosphate): see guanine. ) project in which investment would be about $3 bn. The project will include a 1,200 MW plant, development of gas reserves in the Berkine Basin and a pipeline from the field to the power station. The venture will be selling power locally and in neighbouring countries. Conoco will also consider having a large-scale water desalination plant adjacent to the power plant.