Page 5 - AfrOil Week 02 2021

AfrOil COMMENTARY AfrOil

Threats to production Sanalla did not say when he expected this
When the ceasefire deal was signed, GNA and milestone to be reached. He did suggest, though,
LNA agreed to work together to hammer out a that GECOL devote more attention to solar
mutually acceptable solution to the matter. To power and other types of renewable energy,
date, though, they have not done so. Nor have especially in areas not well supplied by gas pipe-
they reformulated the payment mechanisms lines, in order to expand its generating capacity.
governing the Central Bank’s handling of oil This advice does have some long-term merit,
export revenues. considering that Libya has high solar potential.
Consequently, the recovery of the Libyan oil In the short term, though, the country will have
and gas industry is still somewhat precarious. a hard time compensating for fluctuations in oil
Indeed, S&P Global Platts commented earlier and gas production with renewable generation
this week that the lack of a comprehensive rev- facilities, as these tend to be smaller in scale than
enue-sharing agreement made the North Afri- conventional TPPs.
can state vulnerable to dramatic fluctuations in
production levels. As such, the news service said, Supply alternatives
Libyan oil flows may be subject to more disrup- GECOL might be better served, then, by looking
tion in 2021. for alternative suppliers.
If this scenario comes to pass, there will be Indeed, it seems already to be doing so. In late
disruption in other areas, such as domestic December, the utility signed an agreement on
power supplies. Locally produced crude oil and co-operation with Sonelgaz, Algeria’s national
natural gas are the main fuels for Libya’s electric- gas and electricity provider. That agreement
ity sector. This means that when hydrocarbon calls for the two sides to work together on the In late December,
production goes down, the country’s thermal production, transportation and distribution of GECOL signed
power plants (TPPs) are less capable than usual gas, according to press reports.
of keeping customers adequately supplied. Lib- As of press time, it was not clear whether an agreement
yans have been able to cover some of the gaps by the accord was designed to lay a foundation
using generators, but this solution also has draw- for future deliveries of Algerian gas to Libya. on co-operation
backs, in that many regions are also subject to GECOL said at the time that the document
shortages of refined petroleum products at times served to extend collaboration between the two with Algeria’s
when oil output levels drop or are unstable. companies following the arrival of a Sonelgaz Sonelgaz
technical team last October to assist in the repair
NOC and GECOL and relaunch of the Libyan firm’s Khoms TPP.
NOC has been trying to work with the national Sonelgaz went slightly further. Chaher Bou-
power provider, known as General Electricity lakras, the Algerian utility’s general manager,
Company of Libya (GECOL), to ensure deliv- said that the new accord expanded on previous
eries of feedstock to the latter company’s TPPs. agreements that provided for co-operation in
Last week, for example, representatives of the the area of production. The new deal allows the
two companies met at NOC’s headquarters in two sides to work together on the transporta-
Tripoli to discuss the question of how to keep tion and distribution of gas, as well as training
GECOL’s power stations adequately supplied programmes and renewable energy projects, he
with gas. said.
During that meeting, NOC chairman So far, neither GECOL nor Sonelgaz has said
Mustafa Sanalla acknowledged that the TPPs whether co-operation will involve the delivery
were still not receiving all the gas they needed of Algerian gas to Libya for use in power gen-
to operate at full capacity. He also said that his eration. However, the signing of the agreement
company was working to boost the volume of between the two companies may be a sign that
gas delivered to GECOL but faced certain limi- GECOL is looking beyond NOC with respect to
tations, since it was still waiting for the relevant making sure that its power stations have enough
budgetary measures to be approved. fuel to meet domestic energy demand. ™

NOC and GECOL representatives met in Tripoli last week (Photo: NOC)
NOC and GECOL representatives met in T ripoli last week (Photo: NOC)

Week 02 13•January•2021 www. NEWSBASE .com P5