USA Competes Algeria and Russia in Europe Gas Market

Algeria is losing the battle of gas prices in Europe, after the entry of a new competitor and supplier from the old continent, which is the United States, which came on the line and delivered the first shipment of liquefied natural gas, “LNG” to Europe, which was considered by observers and experts as a declaration of war on gas prices against the classical suppliers to Europe like Algeria, Russia, Norway and Qatar.

First shipment of American exports of liquefied natural gas “LNG” to Europe, will be received by a Portuguese energy company, “GALP”, after being handed over by the American “CHENIERE” that is based in Houston, on April 26.

Other shipments from the same company are expected to reach Europe after the company signed contracts to supply the liquefied natural gas to Europe, with several major companies such as Spain’s Gas Natoral Fenosa, British Petroleum and the Danish Royal Shale.

According to the “Wall Street Journal” an economic newspaper, this move is an unprecedented shift in the European Gas market, and it expected a flare price war between the classical gas suppliers toward the old continent and the United States, noting that Russia’s Gazprom, and the rest of the suppliers are expected to carry out the reduction in gas prices to Europe.

Observers believe that the gas market is living a situation that is similar to the oil market, but Russia is playing the role of Saudi Arabia this time, as it would cut gas prices towards Europe via Gazprom, which will force the rest of suppliers such as Algeria, Norway to cut the gas prices, in the hope of facing the newcomer, which is USA.

This development comes at a time when oil prices began to rise, and surpassed $ 45 a barrel and reached more than $ 46 in Friday trading, supported by a strike of the Kuwaiti oil sector, with news of the resumption of talks on freezing the production at the level of last January.

Libya’s Gas Exports Surpass Algeria Towards Italy

Algeria revenues from gas exports are exposed to heavy losses due to the the decline of the quantity that is exported to Italy terribly over the past year, since they were surpassed by the Libyan exports with a large difference, despite the instability that prevailed in Libya but that did not stop it from reaching high export levels and much larger than Algeria’s exports.

According to the financial outcome of Italy’s Eni for the year 2015, which copy is available to Echorouk, Algeria only covered 7% of Italy’s gas needs which dropped to the fifth grade as the largest exporters of gas towards Italy, including quantities of liquefied natural gas LNG, after Algeria ensured the needs of one-third of Italy’s natural gas years ago, because Algeria was able, in the last year, to export of only 6.05 billion cubic meters, while in the end of 2014 it exported over 7.51 billion cubic meters.

In contrast, Libya’s exports surpassed its Algerian counterpart towards Italy, as its volume reached 7.25 billion cubic meters in the last year, while during 2014 it reached the range of 6.66 billion cubic meters, as the state of war and armed conflict that prevailed in Libya did not prevent raising the volume of exports towards Italy.