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Algeria’s pledge to double EU gas exports “not feasible”


20 Dec 2022 13:00

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20 Dec 2022 13:00

(Montel) Algerian gas production could increase up to 15%, or 15bcm, to 110-115bcm/year in 2023, analysts said on Tuesday, meaning the pledged doubling of exports to Europe announced last week would go unrealised.

With production in the North African nation – which is also a key supplier to Europe – rising, domestic demand was set to increase 3-4bcm, leading to around 50-60bcm for exports, said Jacopo Casadei, gas analyst at Energy Aspects.

Just last week, however, the country said it planned to double its gas production for exports to 100bcm in 2023.

A 10-15bcm rise in production would be partially absorbed by domestic demand, with exports curbed further by limitations on both production and pipeline capacities, he added.

The pledged doubling of exports was “not feasible”, said Casadei, pegging year-on-year exports growth of just 6-12bcm.

“Overoptimistic forecast”

Yet even the 15bcm figure of additional supply looked “optimistic”, said Gonzalo Escribano, director of energy at the Elcano Institute think tank.

For example, the country would “struggle" to absorb more than 20-25bcm of feedgas in liquefaction plants, despite having 30-40bcm of nameplate capacity, due to infrastructure restrictions, Casadei said.

Meanwhile, Algeria was exporting as much gas as it could to Italy but it was sending “minimum” levels to Spain due to a diplomatic spat, added Elcano’s Escribano.

Algeria currently shares a 30.2bcm/year connection with Italy and a 10.5bcm/year pipeline with Spain. It also shipped LNG to European destinations.

Europe was desperately looking for other sources of gas amid a curtailment of Russian flows due to rising tensions over the war in Ukraine, with ING Bank predicting in a new report that prices could surge another 30% next year amid a supply squeeze.

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