Article summary
- Algeria has increased its liquefied natural gas (LNG) export volumes to 2.8 million tons in the first quarter of 2023.
- European countries are diversifying away from Russian LNG supplies and looking towards African gas producers.
- The country is committed to further increasing these volumes as it ensures infrastructure development and lays out plans.
Algeria recently reported that it exported 2.8 million tons of liquefied natural gas (LNG) to European countries in the first quarter of 2023.
The country’s increase in LNG exports is due to European countries seeking to diversify away from Russia’s LNG supplies.
Algeria’s LNG exports are expected to grow even further. It is worth noting that Algeria’s exports of liquefied natural gas declined by 25% in the first quarter of 2022 to about 2.4 million tons, compared to 3.2 million tons during the same period in 2021.
In fact, Eni has been vocal about relying on African countries for LNG supply. In 2022, Claudio Descalzi, the Chief Executive Officer of Eni, stated that the company had finalized agreements and activities to fully replace Russian gas by 2025.
They leverage their strong relationships with producing states and a fast-tracked development approach to ramp up volumes from Algeria, Egypt, Mozambique, Congo, and Qatar.
How Algeria increased its LNG export volumes
According to the Organization of Arab Petroleum Exporting Countries (OAPEC), Algeria’s 2.8 million tons represent the highest growth rate among Arab exporters in Q1 2023. The country pays attention to infrastructural development and maintenance.
As a result, Algeria enjoys strategic relations with its customers and has high reliability in providing gas supplies through pipelines, export infrastructure, and gas liquefaction stations.
Algeria is currently expanding its Skikda oil port. The port is also undergoing the construction of a new liquefied gas berth, aiming to accommodate gas tankers with a capacity of up to 220,000 cubic meters. Additionally, a berth for loading and unloading transported materials through containers is being built.
Algeria is also taking steps to utilize its natural gas assets to kickstart a hydrogen market when the need arises.
In December 2022, the Algerian government announced that the country would consider the feasibility of constructing the Algeria-Sardinia GALSI gas pipeline. The proposed pipeline is initially expected to transport surplus gas and shift towards more hydrogen and ammonia exports as the market matures.
What you should know
Despite having its own shortcomings in the natural gas sub-sector, the Algerian government has committed to investing $40 billion between 2022 and 2026. This investment includes approximately $30 billion to maintain oil and gas production levels by accessing new reserves and around $10 billion for refining, petrochemicals, and gas liquefaction projects.