Sonatrach, Algeria’s state oil and gas corporation, plans to invest $3.2 billion over the next four years in expanding its gas transportation infrastructure and increasing the capacities of the existing pipelines, local media report citing Arbi Bey Slimane, the company’s vice president for pipeline transportation. He said that $530 million will be allocated to develop transportation projects this year.
In particular, Sonatrach plans to build 1.650 km of pipeline and 6 compression and pumping stations by 2020.
The Sonatrach official stated that the expansion of Algeria’s oil and gas transportation potential is connected with the government's plans to guarantee an increase in energy exports by starting production at new fields located in the southeast and southwest of the country.
Previously, Algeria's Ministry of Energy and Sonatrach stated on several occasions that significant growth in hydrocarbon production has been observed after almost ten years of decline. In line with the government’s plans, a production volume of 224 million tonnes of oil equivalent might be reached by 2019.
According to the data provided by the Energy Information Administration, on average, Algeria produces 1.1 million barrels of oil daily (around 55 million tonnes per year) and about 85 billion cubic meters of marketable gas per year. Europe is still the main consumer of Algerian hydrocarbons, receiving 76% of oil exports and nearly 90% of natural gas exports, most of which is supplied through the existing trunk pipeline network.
Algeria is a leading natural gas producer and one of the top three oil producers in Africa.
As of 2014, the country’s proved oil reserves were estimated at 12.2 billion barrels of oil equivalent (1.7 billion tonnes) and almost 6 billion barrels (840 million tonnes) of technically recoverable shale oil. Algeria’s proved natural gas reserves are estimated at approximately 4.6 trillion cubic meters, and another 1.4 trillion cubic meters are considered as undiscovered. It is also known that there could be over 20 trillion cubic meters of recoverable shale gas resources. Algeria’s main hydrocarbon reserves are concentrated in the desert, i.e. central and eastern regions of the country.
Since 2009, Gazprom International (as the operator, with a 49% share) in cooperation with Sonatrach (with a 51% share) has been carrying out a project at the El Assel licence block of the Berkine oil and gas basin, located 150 km southeast of Hassi Messaoud, the oil capital of Algeria. Over the period of joint operation, the partners have discovered four oil and gas fields in the area.