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Is Arab OPEC Going Green?

Written By Brian Hicks

Posted July 10, 2007

Recently I told you about a 100 MW solar power project in Abu Dhabi, one of the United Arab Emirates ( As one of the top oil and gas producers in the world, the UAE won the geological jackpot. Otherwise, it would be a loose confederation of feudal desert monarchies.

Now, sheiks, emirs and other leaders throughout the Arab OPEC states of the Middle East and North Africa are afraid that a return to pre-petroleum poverty will quickly arrive with the end of the Oil Age, so they are turning towards the ever-present desert sun.

The UAE, Oman, and now Algeria are smartly using their massive oil fortunes to finance future energy. Algeria, Africa’s second largest country, has the world’s eighth largest natural gas reserves and comes in at number 14 in world oil reserve rankings, with 11.8 billion barrels of proven reserves and some estimates giving an even higher reckoning.

Yet Algeria and its European gas trading partners (namely France, Spain and Germany) are about to begin a different energy link, as Algeria is establishing a gas/solar co-generation plant at Hassi R’Mel in the country’s desert southern region.

The plant, constructed with the help of Spanish plant company Abener Energia (which also has biomass, bioethanol, and thermal segments), will deliver 150 MW of power to Algeria and ultimately to its export partners.

In terms of existing energy relationships, the New Energy Algeria company, or NEAL, as the nascent project is called, will have no shortage of connections. Sonatrach, the state oil and gas concern, owns 45% of NEAL. Another 45% belongs to the national electrical utility company, with the remainder held by a private firm.

With generation set to begin in two years (2009), the medium-term goal is for NEAL to contribute 5% of Algeria’s national power generation capacity by 2015, helping to provide for a fast-growing population that already numbers 33 million. Exports to Europe should also begin in 2015.

The overarching theme of Arab energy diversification encloses another truth: not all "Arab" countries are the same. Algeria, for example, belongs to the Maghreb Arab Union, a trade body in the western part of North Africa that includes Libya, Mauritania, Morocco and Tunisia (Maghreb, meaning "west," is the term used to refer to this region).

Compare the MAU to the Gulf Cooperation Council in the Persian Gulf, a different regional trade body with a different local culture, history, and economic goals.

Especially as Libyan leader Colonel Qaddafi has turned up the heat on his pan-African statements in recent weeks, calling for a United States of Africa as he turns away from the Middle Eastern Arab states, the nuances of the hydrocarbon-rich Arab world are becoming clearer every day.

Maybe in the end the only thing the 22 Arab states will agree on will be the inevitability of change in a new world of energy options.



Sam Hopkins