People's Democratic Republic of Algeria

Ministry of Energy and Mining

19 ^th World Energy Congress

Breakfast Speech, by Dr. CHAKIB KHELIL

Sydney, Australia, 5^th -9^th September 2004

Mr. President,
Excellencies,
Ladies and Gentlemen,

First of all, I would like to thank Mr. Gerald Doucet, Secretary General of the World Energy Council, for his invitation to this meeting and congratulate him for his great initiative in organizing this debate on the main issues regarding the future of the energy sector.

There is no immediate alternative solution to fossil fuel to satisfy, under reasonable economic conditions, world energy needs. Meanwhile the international community is taking the necessary steps to limit the increase of greenhouse gas effects and in particular C02emissions; stemming from the use of fossil fuels.

Considerable efforts have been made in the last 2 decades to improve energy efficiency as well as energy savings. While renewable energies are more utilized, world energy primary production is still dominated by fossil energy for 80% of the total production. (58% for liquid and gas hydrocarbons and 22% for coal).

Ladies and Gentlemen,

The use of natural gas is gaining ground to assure the transition to clean and renewable energy, given its low carbon/hydrogen ratio and its relative abundance.

Not only has gas almost no sulphur or particle emissions, but its combustion generates by unit of produced energy, 25 to 30% lessC02 compared to diesel and 40 to 50% less compared to coal.

Natural gas use increased thanks to the technical and economic performances of combined cycles power plants, which reduces construction delays and investments costs.

World gas supplies were multiplied by 2.5 over the period 1970 2002 and reached 2 600 GM3 in 2002.

With regards to availability, the proven gas reserves never ceased to grow and represent 180 000 Gm3 (approximately 70 years of consumption at current levels) whereas the resource potential remains considerable.

Ladies and Gentlemen,

According to a number of experts, hydrogen should slowly find its place in the energy system in the long run.

Hydrogen appears as the preferred source in the quest for alternative new energies. This source is considered by many experts as representing the future of energy and could emerge by the middle of this century.

However, many obstacles remain in the way to achieve this goal, among which:

• Firstly: its production, currently based on hydrocarbons, generates C02 emissions, which are to be limited using capture devices and sequestration of carbon.

• Secondly: its weak calorific value still makes its transport and storage difficult and expensive and will probably raise the question of the development of the necessary infrastructures.

As a conclusion, one can say that given the role that hydrocarbons still will have in meeting energy demand, the attractiveness of natural gas is justified by its flexibility of use, its comparative advantages, its broad availability, and its social acceptability.

Natural gas also has the necessary qualities to contribute as a transition energy towards new forms of energy where greenhouse effect gas will be better controlled.

I thank you for your attention.