Algeria Signs Oil, Gas Deal as OPEC Member Boosts Sales

Algiers, Algeria, Capital Markets in Africa: Algeria will supply oil and other energy products to Jordan for the first time under a memorandum of understanding signed on Monday, as the OPEC member seeks to diversify sales after years of stagnating oil production.

Algeria’s state-run Sonatrach Group will start liquefied natural gas and liquefied petroleum gas shipments to Jordan in September, followed by crude oil, Algerian Energy Minister Salah Khebri said in an interview in Amman. Sonatrach and National Electric Power Co. of Jordan should reach a final agreement in the next few weeks, he said, without specifying shipment volumes. Sonatrach will also explore for oil and gas in Jordan.

“This is the first time that we are going to get fuel and gas from Algeria,” Hasan Hiari, head of the natural gas department at Jordan’s Ministry of Energy & Mineral Resources, said in a separate interview in Amman. “We are keen on diversifying our energy sources.”

Algeria, Africa’s biggest natural gas producer, has invited international companies to help develop its oil and gas fields as Sonatrach has struggled to raise production after a corruption probe at the company and a deadly al-Qaeda terrorist attack in 2013 at the In Amenas gas field. The nation operated 55 oil rigs in April, an increase in each month since November, according to Baker Hughes Inc. Algeria pumped 1.1 million barrels a day of crude in April, its output little changed since 2013.

Algeria, the ninth-biggest member of the Organization of Petroleum Exporting Countries, plans to raise crude output by 5 percent in 2016 and offer energy-exploration rights to foreign companies, Salah Mekmouche, Sonatrach vice president of exploration and production, said in an interview in Algiers in December. Natural gas pipeline flows from Algeria, the European Union’s third-biggest supplier, into Italy reached a three-year high in April, data from Italian grid Snam Rete Gas SpA show.

Jordan, which has almost no energy resources of its own, is also looking at solar, wind and nuclear power for future energy needs. By 2025, 48 percent the nation’s electricity will be generated by nuclear reactors, up from 4 percent today, Prime Minister Abdullah Ensour said Monday at an energy conference in Amman. It plans to have 500 megawatts of solar and wind power capacity operational by the end of this year.

Source: Bloomberg News