Algeria Most Suitable Supplier of Gas to Europe, Egyptian Expert Says

Algeria’s strategic location enables it to compete in international gas markets, and makes it the “most suitable” country for the transit of any future gas supply projects, especially from Nigeria towards Europe, noting the importance of the medium-term contract that Algeria recently signed with Germany which confirms its “high reliability” as a gas supplier, the gas industries expert at the Organization of Arab Petroleum Exporting Countries (OAPEC), Wael Hamed Abdel Moati, said in an interview with Algerian Presss Agency.

The Egyptian expert explained that “Algeria’s geographical location and its proximity to other gas-rich regions, such as Nigeria, makes it the most suitable country as a transit country for any future projects to pump gas from Nigeria to Europe, as soon as the economic and political conditions for that are available, especially since it has the surplus capacity in the existing export lines linking it to Europe.

“In addition to Algeria’s location close to Europe, which enables it to compete in international markets, including availability on the Spot market and exporting large quantities of liquefied natural gas, according to market need and surplus production, its distance from areas witnessing tensions and unrest makes it a reliable country in this industry”, the OAPEC expert added.

In this context, the Egyptian energy advisor asserted that the gas industry in Africa began in Algeria with the beginning of production in the early sixties, and exporting LNG from the first industrial group in the world in 1964 in Arzew (the Algerian Company for Liquefied Methane – Camel), thereby inaugurating the launch of international trade for liquefied natural gas, which made Algeria one of the pioneers of this industry in Africa.

“Today, Algeria has been able to rank first in Africa as the largest exporter of liquefied natural gas for the first time since 2010, surpassing Nigeria, which has maintained this position for more than a decade”, the gas industry expert attributed this success to “Algeria’s long-standing experience in exploiting gas to develop its sectors, its diverse economic and export systems which are also the largest on the continent in terms of capacity.”

In this context, the expert, who prepared the recently issued report by OAPEC on developments in the gas and hydrogen markets for 2023, noted Algeria’s success in increasing its exports of liquefied natural gas during 2023 to approximately 13 million tons, with an annual growth rate of 26%, recording the highest growth rate in the Arab countries, and one of the highest growth rates globally during the same period.

Hamed Abdel Moati also pointed out in the same context that “the medium-term natural gas supply contract, recently signed between Sonatrach and the German company VNG Handel & Vertrieb GmbH, has “more than an important significance for the gas market in general and for Algeria in particular.” He added that choosing Germany as a supplier “confirms the high reliability that Algeria enjoys in European markets.” What further confirms this reliability, he explained, is “the German company’s acceptance of concluding a medium-term contract, which has always opposed this type of contract because of the preference to purchase from Spot market”.

“Algeria’s gas transportation infrastructure, which links it with European markets, can also be exploited to export hydrogen with technical modifications or the creation of parallel paths to connect with the Southern Hydrogen Corridor, as is the case with Algeria’s success as a gas supplier for European markets, these markets, led by Germany, are the most prominent candidates to import hydrogen from Algeria, based on the European market’s need to import 10 million tons of hydrogen annually from outside the European Union,” expert Abdel Moati confirmed.

In this regard, the expert considered Algeria’s steps in this endeavour, especially the announcement of the national hydrogen strategy in March 2023, very important to attract international operators and to pave the way for investment in this field.