Algeria- Algeria maintained its tenth place globally and first in Africa among the largest natural gas producing countries, and its production share increased by 4% to reach 101.5 billion cubic meters during 2023, compared to about 97.6 billion cubic meters in 2022.
The country’s share of global production amounts to about 2.5%, according to the annual Statistical Review of World Energy report issued by the British Energy Institute in April 2024.
Algeria also ranked seventh in the world in terms of liquefied natural gas production capacity, with 25.5 million tons annually until the end of last February, according to a report by the International Gas Union issued on July 8.
Algeria’s exports increased from Liquefied gas by the end of 2023 to reach 13 million tons, accounting for about 3% of the global market, which places it in seventh place globally.
1- What is the volume of gas production in Algeria?
Algerian Energy Minister Mohamed Arkab confirmed last May that Algeria’s natural gas production in recent years has averaged about 137 billion cubic meters, while it had reached 127 billion cubic meters in 2015.
Algeria’s production of various types of gas during the year 2023 was as follows:
- Liquefied gas: 13 million tons.
- LPG: 9.4 million tons.
- Gas condensates: 8.3 million tons.
2- How big are the gas reserves in Algeria?
Proven hydrocarbon reserves – which include all products combined, including oil, gas, condensates and liquefied petroleum gas – are estimated at more than 4.3 billion tons of oil equivalent (or more than 12 billion barrels), 55% of which is natural gas.
The Algerian Minister of Energy announced that Sonatrach has made 8 important oil and gas discoveries since last January.
These discoveries are located in the state of Bechar (southwest), south of the state of Ain Salah (south), the states of Djanet and Illizi, and east of the state of Ouargla (southeast).
3- What are the most important gas fields in Algeria?
Algeria has the fourth largest gas field in the world in the Hassi R’mel region (south of the capital Algiers), extending about 70 kilometers from north to south, and about 50 kilometers from east to west, with an annual production capacity estimated at about 100 billion cubic meters of natural gas. The Hassi R’mel field employs approximately 4,000 workers.
In addition to the Hassi R’mel field, Algeria has a significant number of major gas fields, the most important of which are:
- Rod El-Nas field (Ilizi), the first well was drilled in 1961.
- Kherba site: It was discovered in 1957 and is located in the northern part of the Ain Salah region.
- Ajlah field: discovered in 1956.
- Hassi Berkine South field: discovered in 1995, and work began in 1998.
4- What about the volume of Algerian gas exports?
- Algerian liquefied gas exports, according to a report by the Washington-based Energy Research Unit, reached 3 million tons during the first quarter of 2024, compared to 2.9 million tons during the same period in 2023.
- Algerian gas exports stabilized during the years 2023 and 2022, respectively, at around 48.9 billion cubic meters, compared to 47 billion cubic meters in 2023.
- Algeria’s gas export revenues amounted to an average of $18 billion during the years 2022 and 2023, compared to $13.5 billion in 2020. This is due to the rise in prices, due to the geopolitical crises witnessed by the world, most notably the Russian-Ukrainian crisis.
5- What are the most important markets for exporting Algerian gas?
The eighth edition of the Gas Exporting Countries Forum’s World Gas Outlook 2050 report expects Algeria to maintain its position as an important supplier of natural gas to the European market in the long term.
The report explained that Algeria is the main supplier of natural gas to southern Europe, allocating about 70% of its exports to these markets via gas pipelines, compared to 30% in the form of liquefied gas.
According to a statement by the Energy Platform on its website, Algeria topped the list of gas exporters to Spain in March 2024, with a share of 42% and a share of 12.2 terawatt-hours.
Gas companies in Europe use the units of measurement gigawatts and terawatts in their European transactions (gigawatt/hour equals 3.2 million cubic feet of gas), and (terawatt/hour equals 3.2 billion cubic feet of gas), according to the same platform.
Algeria supplies Europe with gas via two pipelines, the first of which is Transmed, which connects it to Italy via the Mediterranean Sea, passing through Tunisia, with a capacity of 32 billion cubic meters annually.
The second line is “Medgaz”, which connects the town of Beni Saf on the country’s western coast to the city of Almeria in southern Spain, with an annual transport capacity of 10 billion cubic meters.
6- What about the volume of investments in the gas sector in Algeria?
There are no figures related to the gas sector alone, but rather figures related to the entire energy sector as follows:
- Algeria’s energy minister said in March 2024 that investment in the country’s energy sector exceeded $9 billion in 2023 compared to $8 billion in 2022.
- As part of its medium-term plan from 2024 to 2028, Sonatrach has allocated $36 billion to increase primary production in the energy sector to 207 million tons equivalent in 2028, compared to 190 million tons in 2023.
- An amount of $50 billion has been allocated for investment during the period 2024-2028, of which $36 billion is directed mainly towards exploration and production.
7- Who are the most important partners in the gas industry in Algeria?
- Equinor Norway: The company has been present in Algeria since 2004, and is a partner with Sonatrach and BP in the oil fields in the production phase of both In Salah and In Amenas, and is also a partner with Sonatrach in the exploration site in Timisit.
- Italian company Eni: Sonatrach announced in 2022 that it had made a discovery in partnership with the Italian group after drilling an exploration well “in the Saif Fatma 2 exploration block”, located in the northern region of the Berkine Basin.
- TotalEnergies: The company works in partnership with Sonatrach in the fields of exploration and manufacturing, and in gas projects in the Tin Fouy, Tabankort, Timimoun and Ahnet areas in partnership with Sonatrach.
8- What about the direct contribution of the gas sector to the Algerian economy?
Economic expert Ahmed Al-Haidousi confirms that gas exports in Algeria contribute to economic development in various ways:
- Financing major infrastructure projects such as roads, bridges, airports and railway network expansion in line with the 3,000 km line effort.
- Diversifying and stimulating the country’s economy, by supporting investments in many sectors.
- Supporting start-ups and all projects, especially in the mining, manufacturing and renewable energy sectors.
- Financing health and education sectors.
- Achieving social development through housing programmes launched by the Algerian government, such as a quarter of a million housing units distributed in 2024.
Al-Haidousi pointed out in his interview with Al Jazeera Net that gas revenues in Algeria enhance the stability of macroeconomic indicators through:
- Boosting foreign exchange reserves to nearly $80 billion
- Significant foreign exchange earnings from gas exports contribute to controlling inflation.
9- What does the future of the gas sector in Algeria look like?
As part of Sonatrach’s first strategy, Algeria plans to increase gas production to 200 billion cubic meters of gas annually within 5 years.
Professor of Economics at Setif University, Faris Habash, says that Algeria has developed its production and export capabilities remarkably, especially in the last four years with the adoption of the new hydrocarbons law and in light of the geopolitical developments that the world is witnessing.
Habash confirmed to Al Jazeera Net that Algeria is a safe and reliable partner for all importers, especially in the Mediterranean region and southern Europe, which has led it to conclude a number of strategic and important agreements with many major international companies in the field of energy and natural gas exploration, such as the Italian company Eni, the American company ExxonMobil, and the Norwegian company Equinor.
He points out that Algeria is the second largest source and supplier of gas to Europe, with a share of 19% after Norway. The country’s contributions in this context are estimated at 92 million cubic metres per day, and it is helped in maintaining its position by a strong infrastructure, especially with regard to the pipeline network through which it exports gas directly to Europe.
Habash added that a list of new customers have expressed interest in Algerian gas, most notably Germany, Croatia, Austria, Hungary and Slovenia, especially with the shift of gas eastwards towards China, which strengthens Algeria’s position in the international arena.
