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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.

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Presentation on theme: "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."— Presentation transcript:

1 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 Managing Director of NAFTAL - Algeria

2 2 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. 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009

3 3 The consumption energy model : Rank of LPG 2. Place of LPG in the Algerian energy policy Strategic options Conventional 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 & LPG Renewable and solar energies promotion Act Saving Energy Act (1999) Energy Auditing (déc ) The SavingEnergy NationalPlan The saving Energy National Fund Intergouvernement Commetee for Saving Energy Environment Act New fuels pricing structure New tariffs on Electric power & gas 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009

4 4 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. 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 Million tons

5 5 4. LPG meeting energy needs in Algeria ProductUses 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 gastransportation Large specter of uses… In 2008, LPG consumption in Algeria represented 7 % of the total final energy consumption. 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 …Consumption

6 LPG in the Algerian energy chain 4. LPG meeting energy needs in Algeria 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 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.

7 7 Source Propane Production Butane Production Total Treatment units GP1Z and GP2Z Oil refineries LNG plants Separation units (in oil and gas fields) Total LPG production in Algeria (2008) Production of LPG in gas fields Production of GPL in oil fields Treatment units (GP1Z and GP2Z) LNG plantsOil 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 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 Million tons

8 8 Fuels Aviation Fuels Marine Fuels Lubricants Bitumen Tyres Training LPG 5. LPG Market in Algeria NAFTAL : the leading LPG distributor in Algeria (1) 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 NAFTAL is an Algerian company for distribution of petroleum product and LPG. NAFTAL is 100% subsidiary of SONATRACH GROUP. Naftal missions Sales of petroleum products and LPG Development of distribution infrastructures and complying with the environment and safety energy policy Training in petroleum products distribution business

9 9 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) vehicles (heavy duty trucks and tankers) Storage Transportation Distribution network service stations 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 Staff LPG Division Fuels Division Marketing Division LPG Districts Fuels Districts Marketing Districts Organization 5. LPG Market in Algeria

10 10 Butane : Consumption The Algerian butane consumption rose from 1 million tons in 1990 to 1.5 million tons in 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. 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October tons 5. LPG Market in Algeria

11 11 Propane consumption rose from tons in 1990 to 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 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October tons 5. LPG Market in Algeria

12 12 Centres emplisseurs GPL Bottling plants Naftal (42) Bottling Plants on project (30) Bottling Plants Other Operators(15) Tiaret Tlemcen Oran Saida SBA Mascara Chlef Tipasa Relizane A.Defla AlgerBoumerdes T.Ouzou Bouira Médea Blida MSila BBA Jijel Béjaia Sétif Annaba El Taref Skikda Mila Guelma S.Ahres OEB Batna Khenchela Tebessa Biskra Laghouat El Oued El Bayabh Djelfa Naama GhardaiaOuargla AdrarTindouf Constantine Tissemsilt Mostaghanem A.Timouchent Tamanrasset Djan et H. Rmel HMD RA1.K RA1.G GP1.ZGP2.Z 5. LPG Market in Algeria (LPG bottling plants)

13 13 LPG demand S hrinking of demand for bottled butane. Expansion of LPG consumption will be carried by propane development and LPG fuel promotion. 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October LPG Market in Algeria tons Bottled

14 14 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 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 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 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009

15 15 Electric facility Natural gas plant 6. natural gas grid expansion Sonelgaz natural gas grid : km

16 16 7. market deregulation Market deregulation objectives ( Law and Decree ) : Opening of the domestic market of petroleum products Promoting investments in storage and distribution of petroleum products. Improvements in terms of public services, safety and environment concerns. Results of 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 ( law and & decrees ) : Unbundling ; Open access with creation of the Storage Infrastructures Manager ; Supervision by the Regulation Hydrocarbons Authority (ARH).

17 17 7. Impacts of the market deregulation LPG Market after the law and & decrees Retail prices Oil refineries LNG plants Service-stations Sales points Bottling plants Wholesale customers Input pricesWholesale 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) 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009 Wholesale distribution

18 18 8. CONCLUSION Algerian energy policy promotes the development of exports and consumption of LPG; Algeria is a one of the leaders in the international market of LPG; Naftal is LPG historical actor and currently the market leader in Algeria alongside with new private operators ; Naftal is shifting its development strategy of LPG from bottled butane to promoting of autogas and bulk propane in order to make up for loss of market (actual and coming) to natural gas. 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009

19 19 Thank you 22 nd World LP Gas Forum, Rio de Janeiro– Brazil 7th – 9th October 2009


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