22 nd World LP Gas Forum, Rio de Janeiro - Brazil 7 th – 9 th October 2009 ALGERIA : A LEADING LP GAS EXPORTER AND CONSUMER Said Akretche, Chairman and.

22nd World LP Gas Forum, Rio de Janeiro - Brazil

7th – 9th October 2009

ALGERIA : A LEADING LP GAS EXPORTER AND CONSUMER

Said Akretche , Chairman and Managing Director of NAFTAL - Algeria

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1. Introduction

Algeria is a leading LPG producing country.

In 2008, Algerian exports reached 7.5 million tons and domestic consumption exceeded 1.95 million tons.

However, the on going policy proping up natural gas consumption has hampered the growth of LPG in particular bottled butane, a product that remains the vital source of energy in rural areas.

Nevetherless, opportunities for development of the domestic market of LPG (bulk butane, bulk propane, small public distribution network of LPG and LPG auto gas) exist and can be a valuable alternative.

Thanks to abundant resources and because of their properties, LPG can play a greater role in meeting energy needs in transportation, industrial and agro business sectors in the future.

22nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009

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The consumption energy model : Rank of LPG

2. Place of LPG in the Algerian energy policy

Strategic optionsConventional fuels substitution by

Widespread use of LPG Fuel

The Algerian energy

consumption model

Promotion of use of the most available energy forms

Energy efficiency

Tariff policy

Environment protection

Natural gas & LPGRenewable and solar

energies promotion Act

Saving Energy Act (1999)Energy Auditing (déc 05-495)

The SavingEnergy NationalPlan The saving Energy National FundIntergouvernement Commetee

for Saving Energy

Environment Act

New fuels pricing structure New tariffs on Electric power & gas


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3. Exports of LPG

Algerian LPG development strategy is based on :

The strengthening of its leadership on the European market in general and the Mediterranean market in particular;

The increase of its shipping capacity;

Downstream integration; Investment in terminals & storage capacity ;

Arbitrage opportunities.


Million tons

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4. LPG meeting energy needs in Algeria

Product Uses

Propane

Industrial sector ( bulk propane and bottled propane, petrochemicals, power, generation, fuel for agro business and small industries ….)Domestic sector (collective propane for small isolated agglomeration, small tank, bottled propane…)

Commercial butane

Industrial sector (bulk butane, fuel for clean industries, etc.) Residential and commercial sector (bottled butane)

LPG auto gas transportation

Large specter of uses…

In 2008, LPG consumption in Algeria represented 7 % of the total final energy consumption.

In 2008, LPG consumption in Algeria represented 7 % of the total final energy consumption.


…Consumption

LPG in the Algerian energy chain

4. LPG meeting energy needs in Algeria


LPG is produced in oil and gas fields, located in the southern region of Sahara.

It is transported by a an extended pipelines network to separation plants in Arzew.

LPG is also produced by oil refineries and LNG plants.

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SourcePropane

ProductionButane

ProductionTotal

Treatment units GP1Z and GP2Z

4.50 4.05 8.55

Oil refineries 0.08 0.49 0.57

LNG plants 0.65 0.29 0.94

Separation units (in oil and gas fields)

0.095 0.20 0.295

Total 5 .325 5.03 10.355

LPG production in Algeria (2008)

Production of LPG in gas fields

Production of GPL in oil fields

Treatment units (GP1Z and GP2Z)

LNG plants Oil refineries

Propane and Butane

Export

Domestic market

Bulk Propane and Bottling Propane

Bulk Butane and Bottling Butane

LPG/F

Separation units (in oil and

gas fields)

LPG supplies

4. LPG in meeting energy needs in Algeria


Million tons

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Fuels

Aviation

Fuels

Marine Fuels

LubricantsBitu

men

Tyres

Training

LPG

5. LPG Market in Algeria NAFTAL : the leading LPG distributor in Algeria (1)


NAFTAL is an Algerian company for distribution of petroleum product and LPG.

NAFTAL is 100% subsidiary of SONATRACH GROUP.

Naftal missionsSales of petroleum products and LPGDevelopment of distribution infrastructures and complying with the environment and safety energy policyTraining in petroleum products distribution business

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NAFTAL : the leading LPG distributor in Algeria (2)

49 fuels storage facilities; 03 LPG bulk storage facilities; 42 LPG bottling plants; 47 bottled LPG storage outlets; 26 aviation fuels storage facilities 06 marine fuels storage facilities 27 lubricants and tyres warehouses 15 bitumen units

910 km of transmission pipeline (180 km under construction)

3 000 vehicles (heavy duty trucks and tankers)

Storage

Transportation

Distribution network 1 940 service stations


Organization

5. LPG Market in Algeria

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Butane : Consumption

The Algerian butane consumption rose from 1 million tons in 1990 to 1.5 million tons in 2008.

During this period, the annual average growth rate had been 2.4%. This low growth was due mainly to rural exodus and natural gas grid expansion.

In 2008, butane represented 75 % of total LPG sales.

The Algerian butane consumption rose from 1 million tons in 1990 to 1.5 million tons in 2008.

During this period, the annual average growth rate had been 2.4%. This low growth was due mainly to rural exodus and natural gas grid expansion.

In 2008, butane represented 75 % of total LPG sales.


1000 tons


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Propane consumption rose from 48 000 tons in 1990 to 166 000 tons in 2008

The annual average growth on this period had been 7.6 %

The growth in demand is mainly bolstered by the industrial sector.

Sales of bottled propane stabilized in the 1990s. Before 2004, sales maintained the same growth at a rate of 0.5 % a year.

During the last ten years, the LPG fuel average consumption growth rose by 10 % per year

The share of LPG fuel in the total consumption of fuels is small (4 % in 2008).

Propane consumption rose from 48 000 tons in 1990 to 166 000 tons in 2008

The annual average growth on this period had been 7.6 %

The growth in demand is mainly bolstered by the industrial sector.

Sales of bottled propane stabilized in the 1990s. Before 2004, sales maintained the same growth at a rate of 0.5 % a year.

During the last ten years, the LPG fuel average consumption growth rose by 10 % per year

The share of LPG fuel in the total consumption of fuels is small (4 % in 2008).

Propane & autogas : Consumption


1000 tons


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Centres emplisseurs GPL

Bottling plants Naftal (42)

Bottling Plants on project (30)Bottling Plants Other Operators(15)

Tiaret

Tlemcen

Oran

SaidaSBA

Mascara

ChlefTipasa

Relizane

A.Defla

Alger Boumerdes

T.Ouzou

Bouira

Médea

Blida

M’Sila

BBA

JijelBéjaia

Sétif

AnnabaEl Taref

Skikda

Mila

Guelma

S.Ahres

OEB

Batna

Khenchela

Tebessa

Biskra

Laghouat

El Oued

El Bayabh

Djelfa

Naama

Ghardaia Ouargla

AdrarTindouf

Constantine

Tissemsilt

Mostaghanem

A.Timouchent

Tamanrasset

Djanet

H. R’mel

HMD

RA1.KRA1.KRA1.GRA1.G

GP1.ZGP1.Z

GP2.ZGP2.Z

5. LPG Market in Algeria (LPG bottling plants)

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LPG demand

Shrinking of demand for bottled butane .

Expansion of LPG consumption will be carried by propane development and LPG fuel promotion.

Shrinking of demand for bottled butane .

Expansion of LPG consumption will be carried by propane development and LPG fuel promotion.



1 000 tons

Bottled

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Sonelgaz, the public company for power generation and natural gas distribution is the main competitor for LPG distributors;

Between 2004 and 2008 : the natural gas distribution network increased by 4000 km to a total length of 27 000 km;

2008 : natural gas grid expansion reached 30% of households. The expansion of natural gas affected negativelly the sales of LPG; especially bottled butane.

Sonelgaz had an ambitious program for the 2004-2009 time span of connecting many villages and towns to its natural gas grid;

2012 : Sonelgaz objective is to reach up to 50 % of households.

Sonelgaz, the public company for power generation and natural gas distribution is the main competitor for LPG distributors;

Between 2004 and 2008 : the natural gas distribution network increased by 4000 km to a total length of 27 000 km;

2008 : natural gas grid expansion reached 30% of households. The expansion of natural gas affected negativelly the sales of LPG; especially bottled butane.

Sonelgaz had an ambitious program for the 2004-2009 time span of connecting many villages and towns to its natural gas grid;

2012 : Sonelgaz objective is to reach up to 50 % of households.

6. natural gas grid expansion


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• Electric facility

• Natural gas plant

6. natural gas grid expansionSonelgaz natural gas grid : 27 000 km

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7. market deregulation

Results of 1997-435 Decree :

Emergence of 15 private operators in bottling and LPG sales. Distribution operations improvements ; better services to the customer.

With some difficulties :

Cross filling; Safety issues; Marketing unfair practices.

New legislation (2005-07 law and 08-289 & 08-290 decrees ) :

Unbundling ;Open access with creation of the Storage Infrastructures Manager ; Supervision by the Regulation Hydrocarbons Authority (ARH).

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7. Impacts of the market deregulation LPG Market after the 2005-07 law and 08-289 & 08-290 decrees

Retail prices

Oil refineries

LNG plants

Service-stations

Sales points

Bottling plants

Wholesale customers

Input prices Wholesale prices

Storage Infrastructures Manager (Gestionnaire des Infrastructures de

Stockage - GIS)

Post stamp rates for logistics

Providers Storage Infrastructures Manager

Distributors

Field treatment units (GP1Z and GP2Z)


Wholesale distribution

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8. CONCLUSION


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Thank you


22 nd World LP Gas Forum, Rio de Janeiro - Brazil 7 th – 9 th October 2009 ALGERIA : A LEADING LP GAS EXPORTER AND CONSUMER Said Akretche, Chairman and.

Documents

lpg consumption

lpg market

lpg production

production of lpg

lpg meeting energy

growth of lpg

rank of lpg

place of lpg