Algeria's Sonatrach To Invest $70 Billion for Shale Gas Drilling

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Algeria's state-owned energy company, Sonatrach plans to invest heavily in shale gas drilling in the near future. Sonatrach acting Chief Executive Officer Said Sahnoun said on a national radio broadcast that the company plans to spend at least $70 billion for shale gas drilling projects.

"Creating an energy mix is essential and we need to increase, strengthen and diversify the resource base in order to have a sufficiently flexible offering that would allow us to adapt to the needs of a changing environment. We cannot ask Sonatrach to remain on the side lines of the technology and not to engage in operations that tend toward efficiency and optimization," Sahnoun said in a response to questions.

The first exploration well was drilled into the Ahnet shale formation. Algeria's domestic gas consumption during 2015 is expected to total 35 billion cubic meters (bcm) after reaching a record one-day peak of 100 million cubic meters on January 1, Sahnoun said.

According to Sahnoun, Algeria's 2014 oil and gas export revenues fell to $59.5 billion, from $63.4 billion in 2013. The average selling price for Algerian crude last year was $98 per barrel, he said. "Our assessment is that, in Algeria, a project to produce 20 bcm/year would create 50,000 direct and indirect jobs," Sahnoun said.

The production of 20 bcm/year of shale gas would require 200 wells a year, to be drilled over the 20-year life of the project, entailing a total investment of $60 billion to $70 billion, he estimated, noting that Algeria's technically recoverable shale gas resources have been put at 20 trillion cubic meters. "We will engage in this endeavour if the parameters mentioned earlier are met. The pilot well In Salah is in the process of producing clean gas," Sahnoun said.

Currently, Algeria is the biggest natural gas exporting country in Africa. In December, Turkey agreed to import liquefied natural gas (LNG) from Algeria for 10 years, beginning this January. . Turkey will import 4.4 bcm of LNG per year from Algeria via its LNG terminals.

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