Italy’s Eni to Build Solar Plant in Algeria

Italy’s energy company Eni and Algeria’s state-owned hydrocarbons firm, Sonatrach, inked an agreement to build a solar plant to help the north African country reduce its dependency on gas.

In addition to meeting local electricity demand, the plant would also free up more gas for the export market, local media said.

The 10MW plant will be constructed in southern Algeria, providing Eni’s Bir Rebaa field with power. Construction is scheduled to begin before the end of the year.

This investment comes at a time Algeria is struggling to maintain a consistent oil and gas industry on the backdrop of rising domestic consumption, unfavourable business environment and terrorist threats pushing vital foreign partners to exit the country.

Algeria’s gas production and export capacity is facing dim prospects with estimates that the North African country could become a net importer of Liquefied Natural Gas (LNG) in about two decades.

Last May, the Oxford Institute for Energy Studies issued a report entitled Algerian Gas: Troubling Trends, Troubled Policies. The document points out to the depletion of Algerian gas and the declining export capacity.

“Algeria would be left with only 15 bcm/year to export by 2030. In a lower production or high demand scenarios, it will cease exporting all together, therefore importing gas beyond any such a point,” says the report.