Algerian fuel flows to Europe fell by round 6 Bcm in 2022, totaling 44 Bcm final yr, in accordance with knowledge from S&P World Commodity Insights, as decrease LNG exports to the Continent and diminished transit to Spain had been solely partially offset by burgeoning vitality ties with Italy.
Nonetheless, with decrease Russian fuel provides to Europe final yr, Algeria — Africa’s largest fuel exporter – noticed its share of EU fuel imports enhance, accounting for round 12% of the EU’s fuel imports in 2022, S&P World knowledge confirmed, up from some 10% in 2021.
And with Europe’s ongoing drive to cut back Russian fuel imports, EU-Algeria vitality ties have strengthened because the Russia-Ukraine battle.
In international phrases, Algeria produces round 100 Bcm of fuel yearly, however consumed round half of its manufacturing domestically, in accordance with state-owned producer Sonatrach.
Of its exports, Italy is rising in significance, exemplified by Italian Prime Minister Giorgia Meloni’s go to to Algiers final week, accompanied by Eni CEO Claudio Descalzi. The Italian premier reaffirmed the significance of the 2 nations’ bilateral relationship in her official feedback, persevering with the method taken by her predecessor Mario Draghi.
Eni signed two strategic memorandums of curiosity with Sonatrach on Jan. 23, solidifying cooperation on future joint initiatives regarding vitality provide, decarbonization and vitality transition, in accordance with an organization assertion.
Pipeline exports to Italy by way of the TransMed pipeline – with its technical capability of as much as 35 Bcm/yr — totaled 22 Bcm in 2022, climbing from a complete of 20 Bcm in 2021, S&P World knowledge confirmed.
For Algeria, pipeline exports stay the important thing focus. In December, the Algerian authorities introduced that the nation would once more take into account the feasibility of establishing the Algeria-Sardinia GALSI fuel pipeline.
The proposed pipeline is initially anticipated to move surplus fuel, shifting to extra hydrogen and ammonia export upon market maturation, in accordance with Algeria’s Minister of Vitality and Mining, Mohamed Arkab.
Spanish flows decline
In contrast, Spanish imports of Algerian fuel in 2022 paint a blended image, reflecting a sophisticated commerce relationship between the 2 nations in recent times. In June, Algeria opted to droop a two-decade outdated friendship treaty, freezing a number of banking providers to and from Spain within the wake of Spain’s reversal of its neutrality place within the Western Sahara dispute.
In 2022, Algerian fuel exports by way of the Medgaz pipeline — the one pipeline route for Algerian fuel to achieve Spain after the GME line by way of Morocco was suspended – totaled 9 Bcm, growing from slightly below 8 Bcm the yr prior, in accordance with knowledge from S&P World.
Nonetheless, accounting for the closure of the GME pipeline in late 2021, which noticed slightly below 6 Bcm of extra fuel circulate to Spain, whole Algerian fuel exports to Spain fell by greater than 35% in 2022 in comparison with the yr prior, the info confirmed.
Spain’s largest fuel importer Naturgy stated Oct. 6 it had reached an settlement with Sonatrach on revising the pricing phrases of their long-term fuel provide contracts.
The revised pricing phrases, which weren’t disclosed, are to be utilized retroactively to volumes provided for the entire of 2022 and think about “market circumstances,” Naturgy stated.
It stated the 2 firms had been persevering with negotiations on the contractual costs relevant from Jan. 1, 2023.
The contracts coated by the worth revision had been signed greater than 20 years in the past and canopy volumes of 5 Bcm/yr by to 2030, with each events contractually obliged to the amount, Naturgy stated.
Sonatrach holds a 4% stake in Naturgy, whereas the 2 firms are additionally co-owners of the Medgaz pipeline that hyperlinks Algeria and Spain.
LNG increase
On the LNG entrance, Spain leads the cost in European import capability, boasting six import terminals throughout the nation, over a 3rd of LNG storage capability within the EU, and a fuel community that lengthy pre-dates the vitality disaster and has cushioned each worth and demand shocks throughout Iberian fuel markets in 2022.
Final yr, Spain strengthened ties with key international LNG exporters, absorbing a substantial portion of US provide, whereas LNG imports totaled slightly below 73% of whole Spanish fuel provide in December 2022, in accordance with knowledge from Spanish transmission system operator Enagas.
Algeria’s LNG exports to Europe had been a contributing issue, coming in at a complete of round 13 Bcm in 2022, however falling from just under 17 Bcm in 2021. Most exports had been shipped to France over that interval, totaling round 4.4 Bcm in 2022, down from round 5 Bcm the yr prior.
LNG exports to Spain accounted for round 500 million cu m of the overall in 2022, falling from round 2.1 Bcm in 2021, whereas exports to Italy totaled 1.5 Bcm final yr, up from round 1.3 Bcm over the identical interval, in accordance with the info.
Whole Algeria LNG exports in 2022, together with to markets exterior of Europe, got here in near 14.5 Bcm.
Platts, a part of S&P World Commodity Insights, assessed the JKM for March at $18.895/MMBtu Jan. 30, the bottom since Jan. 17, because it declined for 5 buying and selling days in a row. Platts assessed the primary half of March at $19.148/MMBtu and the second half of March at $18.643/MMBtu.
Supply: Platts