‘Many new entrants to the sector’ Abdelhak Bouhafs

Abdelhak Bouhafs nostalgically recalls Britain’s participation in the first gas liquefaction in the world – in Algeria – as he surveys his country’s booming energy industry today.
“The plant was built at Arzew in western Algeria in 1964,” he says. “It was also between this coastal city and Canvey Island (in the Thames estuary) that the first commercial voyage of an LNG (liquefied natural gas) tanker was made.”

More than 40 years on, Arzew is still operational and is set to expand further in the near future if plans for three more LNG units are approved.
Mr Bouhafs is president of the Association Algérienne de l’Industrie du Gaz (AIG), which promotes the industry and raises Algeria’s profile in the international gas markets. It also acts as a talking shop for industry professionals, engineers, lawyers and economists.

“Natural gas, given its specific nature, requires some coordination between various interdependent segments – and therefore consultation between the players,” he says.
Mr Bouhafs is less convinced than other observers about the ability of state-run energy companies to withstand competition from the big internationals. “State companies such as Sonatrach and Sonelgaz will not be able to face competition in their traditional, domestic market or beyond Algeria’s borders – which is an imperative objective – unless they are capable of adapting their strategies and their operating methods to international standards,” he says.

Investors’ rights are guaranteed

“They will be able to undertake and succeed in such a transformation only if they are stripped of their public power and relieved of their administrative constraints. They will not be up to competition in accelerating globalisation if they do not have a clear and real control of their strategies and decision-making process.”
Nevertheless, both Mr Bouhafs and others in the energy industry are certain that there will be many new entrants in the sector, as laws concerning privatisation and liberalisation are in place, and there is also a regulatory authority, the Electricity and Gas Regulatory Commission (CREG). “Algeria is the place for investment in energy,” says Nourredine Boutarfa, chairman and managing director of the Algerian Energy Company (AEC).

“There is a huge market nearby in Europe, and Algeria itself is a big consumer market of 31 million people. It’s therefore an important market. At the same time, we want not only investors to come to Algeria, but we would like to see Algerian enterprises make their mark internationally.”
AEC provides potential investors with information and advice, and helps them to find a location which allows them to integrate without any risks.
“All enterprises which invest in Algeria have the same rights as Algerian enterprises,” he says.

AEC is a 50:50 joint enterprise of Sonatrach and Sonelgaz and, as such, has its eye on international markets.
“The energy market is not like other markets and in this sense, Algeria will have an important role to play,” says Mr Boutarfa. “Algeria can build gas pipelines to Europe and provide a stable supply gas of gas without interruption.”