Overview of North Africa

Energy & LPG Markets

Prepared For:

WLPGA North African Summit

May 20, 2010

Hotel Es Saadi
Maarrakech, Morocco

Prepared by:
Ken Otto
Purvin & Gertz, Inc.
 Topics for Discussion

 Global LPG Market Developments

 North Africa Energy Market

 North Africa LPG Outlook

2
Global LPG/Energy Market Highlights

 Overall demand for energy, including LPG, is weak—having

been pulled down by the severe recession that hit
the global economy in 2009.

 Global economies have started to recover in 2010—but

many economies are still weak and unemployment
remains high.

 Crude oil prices have rebounded from low levels seen in early
2009—but remain quite high and very volatile.

 Higher energy prices (including LPG and petroleum) are

putting pressure on many market sectors (including res/com) and slowing
demand growth rates in many developing markets.

 With naphtha prices very high, more petrochemical companies have turned
to LPG to lower their feedstock costs.

3
Global LPG Supply is Expected to Rise by Around 35
Million Tonnes Between 2009 and 2013
LPG Supply, Million Tonnes
300 North America Asia/Pacific  LPG production is expected to
Europe/CIS Middle East rise in most regions of the
Latin America Africa world. Global prod. (2009) is
235 MM tonnes (7.6 MMBPD).
250

 Global LPG production

appears to have declined
slightly in 2009—due to crude
200 oil production cutbacks and
project delays.
 Supply growth in the Middle
150 East will be very strong and
the region will surpass North
America to become the largest
LPG producing region in the
100 world by 2011.
 Overall global LPG supply
growth is expected to average
50 about 3.5%/year through 2013.

0
2000 2002 2005 2008 2009 2010 2011 2013

4
LPG Demand Continues to Rise Fairly Quickly in Asia and
the Middle East
LPG Demand, Million Tonnes
300
North America Europe/CIS Latin America  LPG demand growth has been
Asia Middle East Africa relatively strong in Asia and the
Oceanai Middle East.
250
 Asia is the largest LPG
consuming region in the world,
200
and is still expanding.

 The Middle East is becoming a

more significant LPG demand
150 center—driven by both the
rapid expansion of the
petrochemical industry and
continued growth in the
100
res/com sector.

50

0
2000 2002 2005 2008 2009 2010 2011 2013

5
The Res/Com and Chemical Sectors Will Continue to Lead
the Expansion of the Global Market
World LPG Demand, Million Tonnes
300
Res/Com Chemical Industrial Auto Fuel  The residential/commercial
Refinery Other sector is the largest end-use
market.
250
 Growth in the res/com sector
has slowed somewhat due to
higher prices & the economic
slowdown.
200
 Chemical demand for LPG is
fairly strong due to high
oil/naphtha prices and large
150 NGL-based olefin capacity
additions in the Middle East.

 Future LPG market growth is

100 very dependent on these two
large end-use markets.

 Engine fuel markets also have

50 high growth potential over the
longer term.

0
2000 2002 2005 2008 2009 2010 2011 2013

6
 Topics for Discussion

 Global LPG Market Developments

 North Africa Energy Market

 North Africa LPG Outlook

7
Africa Energy Market Overview

North Sub-Saharan South

Population
6% 20%
NORTH AFRICA 801 Million

SUB-SAHARAN 74%
AFRICA
22%
GDP 38%
1.3 Trillion US$

40%

Energy Demand 24% 27%

SOUTH AFRICA 567 Million TOE

49%

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 Energy Demand in Africa Is Expected to Expand by
Around 15% Over the Next 10 Years

North Africa Primary Energy Demand, Million Tonnes of Oil Equivalent

700

South Africa  Total energy demand in

600 Sub-Saharan Africa has grown by an
North Africa average of 2.7%/yr since
2000. Future demand is
500
expected to rise by
around 1.4%/yr over the
400
next decade.
 North Africa is the fastest
300
growing region. South
Africa is the slowest.

200

100

0
2000 2005 2010 2015 2020

9
 Over 70% of the Total Energy Demand in North
Africa is Concentrated in Egypt and Algeria

North Africa Primary Energy Demand, Million Tonnes of Oil Equivalent

200

Egypt Algeria  Egypt has had the

180
highest average energy
Libya Morocco demand growth rate of
160
Tunisia nearly 5%/yr since 2000.
140
 Demand growth is
expected to slow in most
120
countries in the region
due to higher energy
100
costs and changing
80
consumption patterns.
 Regional energy demand
60
growth is projected to
40
average around 2%/yr
during the next decade—
20
it could be higher.

0
2000 2005 2010 2015 2020

10
 North Africa Energy Demand Will Continue to Rise—
Expanding by About 20% by 2020

North Africa Primary Energy Demand, Million Tonnes of Oil Equivalent

200
 Regional energy demand
Petroleum Natural Gas
180 has grown by an average
Solids Hydro rate of 3.9%/year since
160 2000.
Other

140  Petroleum and natural

gas will remain the top
120 sources of energy.
100  Petroleum has a market
share of around 49%
80 while natural gas has
about 44% of the total
60 energy market.
40

20

0
2000 2005 2010 2015 2020

11
 Most of the Res/Com Energy Demand in North Africa
is Concentrated in Egypt and Algeria

North Africa Res/Com Energy Demand, Million Tonnes of Oil Equivalent

45

Egypt Algeria  The distribution of

40 residential and
Morocco Tunisia commercial energy
35
Libya demand in North Africa is
similar to total energy
30 consumption.

25
 Demand growth is
expected to slow in most
countries in the region
20
due to higher energy
costs and changing
15
consumption patterns.
10

0
2000 2005 2010 2015 2020

12
 LPG Has a Relatively Large Share of the Res/Com Market in
North Africa

North Africa Res/Com Energy Demand, Million Tonnes of Oil Equivalent

45
 LPG has around 26% of
LPG Other Petroleum
40 the total res/com market
Natural Gas Electricity in the region.
35
Other  Electricity is slightly
larger component of
30
regional res/com market
with 30% of total
25 demand.

20  Other petroleum (gas oil,

etc.) also has a sizable
15 market share in the
res/com market.
10
 LPG is expected to
maintain or increase its
5 market share in the
future.
0
2000 2005 2010 2015 2020

13
 Topics for Discussion

 Global LPG Market Developments

 North Africa Energy Market

 North Africa LPG Outlook

14
African LPG Supply is Expected to Rise Over the Next
Several Years
LPG Supply, Million Tonnes
25

North Africa Sub-Saharan South Africa

 North African LPG supply
accounts for over 70% of total
20
African supply.

 LPG production in Sub-Sahara

Africa is due to rise as more
natural gas projects are
15
brought on line.

 South Africa is a small source

of LPG.
10

0
2000 2002 2005 2008 2009 2010 2011 2013

15
Algeria is a Very Large Portion of Total LPG Supply
in North Africa
LPG Supply, Million Tonnes
16

Algeria Egypt Libya Morocco Tunisia  Algeria and Egypt are the
14 largest LPG suppliers in North
Africa.
12
 Algerian LPG production is
expected to gradually rise over
10 the next few years—higher
growth might occur if projects
can advance faster than our
8 projection.

 Overall regional LPG

6
production is expected to
expand by 1.5 million
4 tonnes/year over the forecast
period.
2

0
2000 2002 2005 2008 2009 2010 2011 2013

16
North Africa is the Most Developed LPG Market in Africa

LPG Demand, Million Tonnes

14

North Africa Sub-Saharan South Africa

 About 80% of total LPG
12 consumption in Africa occurs
in North Africa.

10  LPG demand growth in Africa

has averaged 3.8%/yr since
2000.
8
 Future demand growth
expected to be slightly under
6 3%/yr.

0
2000 2002 2005 2008 2009 2010 2011 2013

17
Use of LPG in the Res/Com Sector Dominates the
Market In North Africa
North Africa LPG Demand, Million Tonnes
12

Res/Com Industrial Engine Fuel

 The residential/commercial
sector accounts for 94% of
10 all LPG demand in North
Africa.

 LPG demand has grown by

8 an average rate of 4.2%/yr
since 2000.

6
 Our projection calls for
future demand growth of
around 2.7%/yr.

0
2000 2002 2005 2008 2009 2010 2011 2013

18
Average Per Capita LPG Consumption as Res/com Fuel is
Reasonably High in North Africa
Per Capita Res/Com LPG Consumption, Kg per Capita
80
70
60 52.0
50.0
50 42.6
40 35.9

30 23.1
17.3
20
7.6
10
2.1
0
North Sub- South North Latin Middle Far East South
Africa Saharan Africa America America East Europe
Africa

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LPG Demand is Expected to Rise in All Country Markets In
North Africa
North Africa LPG Demand, Million Tonnes
12

Egypt Morocco Algeria Libya Tunisia

 Egypt is the largest market
of LPG North Africa with
46% of total regional
10 demand.

 Demand growth since 2000

has been the highest in
8
Egypt and Morocco
 Egypt 5.5%/yr
 Morocco 5.5%/yr
6  Libya 2.7%/yr
 Tunisia 2.6%/yr
 Algeria 1.5%/yr
4
 Total Region 4.2%/yr

 Overall demand growth

will probably slow
2 somewhat—but still
average around 2.7%/yr.

0
2000 2002 2005 2008 2009 2010 2011 2013

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THANK YOU
FOR YOUR
ATTENTION

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