Algeria - Part 3 - Exports & Logistics.

Algerian crude oil exports since Jan. 1, 2009, have averaged 850,000 b/d, down from almost 1m b/d in early 2007, with an output of 1.3m b/d, down from 1.45m b/d in early 2007 - down from 580,000 b/d in February 2003 and 510,000 b/d in the first quarter of 1999. Exports of condensate and gas liquids including LPGs average 750,000 b/d, from 600,000 b/d in early 2007. Algeria's OPEC quota from Jan. 1 is 1.203m b/d.

Despite an oil glut caused by a global recession originating from a deep financial crisis in the US since the autumn of 2008, there is fairly good demand for Algeria's light/sweet grades and gas liquids. Algeria remains virtually sold out since early 2003. The state-owned petroleum concern Sonatrach imports about 100,000 b/d of heavier crudes for some of its oil refineries, which are purchased by its trading division.

Sonatrach exports of refined oil products average about 285,000 b/d, from 280,000 b/d in early 2007, 380,000 b/d in February 2003, 330,000 b/d in February 2001 and 350,000 b/d in the first quarter of 1997. Algeria exports high quality fuels.

The quality of Sonatrach's crude oil exports is among the best in the world. Its Saharan Blend, 45[degrees] API with 0.05% sulphur and negligible metal content, is used in the US/EU and Asia for a mix with sour crudes. Libya's export crudes are more metallic.

Algerian gasoil is ideal for blending into diesel. It is priced at a substantial premium over Russian gasoil. Due to its high viscosity, it is much in demand in US, Italy and Rotterdam. The quality of the straight run fuel oil, with 0.3% sulphur, is highly valued for power generation and as a cracker feedstock - virtually equal to vacuum gasoil, burned by US and Italian power firms. Algeria's condensate, 65[degrees] API, has no sulphur and is regularly lifted by Shell's US unit Pecten, Oxy, BP, Repsol, Cepsa, Lyondell, etc.

Although the volume of Algerian oil exports remains small by Middle East standards, an interruption of deliveries in the event of accident or unrest in Algeria could jolt the market. This is because of remaining violence in the Niger Delta, which has caused production and exports of light/sweet crudes from Nigeria to fall since 2003.