Algeria intends to launch a licensing round including offshore blocks for the first time within the next two years, according to Minister of Energy and Mining of Algeria, Youcef Yousfi.

The move is in line with its plan to rise production to meet its export obligations and increase domestic consumption.

“We are opening new regions in the south-western and northern parts of the country to exploration [in line with] our policy to intensify exploration in new and mature basins,” Yousfi told journalists at the World Gas Conference in Kuala Lumpur.

Algeria is looking at opening up its offshore areas for the first time for exploration and expects the first offshore wells to be drilled within the next two years, according to Yousfi.

An offshore exploration licensing round will be called after the proposed amendments to the Petroleum Law have been approved.

Algeria is conducting a pilot study to determine the feasibility of a commercial development of its vast unconventional hydrocarbon deposits, the minister said.

Preliminary estimates show the Opec member nation is home to some 8000 trillion cubic feet of shale gas and 1000 trillion cubic feet of tight gas resources in place.

The drive towards opening up more basins for exploration comes on the heels of an expected surge in domestic gas demand and increase in liquefaction capacity for export markets in Algeria.

Domestic gas demand is expected to as much as double within the next two years along with increasing needs for power generation, residential and industrial use. 

“We are generating over 95% of our electricity from natural gas and demand for power is increasing by at least 7% to 10%,” Yousfi told reporters.

Natural gas will be introduced to more households, with the aim of raising the penetration rate of 70% from the present 50% before 2020.

Meanwhile, Algeria is beefing up its liquefaction capacity to handle 40 billion cubic metres of gas in the next two to three years with gas exports projected to increase to 90 billion cubic metres in the next two to three years.

Two new liquefaction plants are expected to come on stream in 2013 and 2014, according to Yousfi. 

The net gas exporting country now produces about 140 billion cubic metres per annum of gas.  About 30 billion cubic metres of gas output is feed to domestic users and 55 billion cubic metres is re-injected to boost production in oil and gas fields. Another 60 billion cubic metres of gas is exported from the country.

Source: Upstream Online