The Algerian Minister of Energy said his country refused to sell off its natural gas. Abdelmadjid Attar, who spoke at the end of a meeting of the Forum of Gas Exporting Countries (GECF), indicated that the Algerian government’s priority remained to supply the domestic market.
The holding of the 22nd ministerial meeting of the Forum of Gas Exporting Countries (FGEC), by videoconference from Algiers, was an opportunity for Abdelmadjid Attar to draw the contours of what will be the new strategy Algerian energy.
Asked about the advantages obtained by the Algerian public hydrocarbon giant, Sonatrach, during the review of a recent gas sale agreement to the Spanish Naturgy, the Minister of Energy said in a press conference that Algeria accepted the principle of negotiating but would not make any concessions that would go against its interests.
“It is out of the question to sell our gas at a loss or at no profit. We would stop production [instead]! I believe that every cubic meter that is left in the basements of the country will be a great thing for future generations. I consider that Sonatrach has negotiated good contracts; they are in line with the current reality of the market, it could not do otherwise. But she did not give a gift. The price is confidential [with Naturgy], but I can guarantee you that Sonatrach did not give any gift to any customer ”, he said during a press conference organized at the end of the GECF meeting.
Priority inside over outside
According to Abdelmadjid Attar, the Algerian approach is intended to be “ realistic ” in a highly competitive context marked by the presence in Europe (Algeria’s traditional market) of Russian natural gas and of American and Qatari liquefied natural gas (LNG). The Minister of Energy explained that several parameters were taken into consideration when negotiating contracts. The volume and nature of the partners’ investment in Algeria are important factors in this process. He notably cited the case of the Italian group Eni ” engaged in a dozen exploration and development contracts on Algerian territory. “
Faced with the pressure of competition on the European market, Algeria has a major advantage: “ Security of supply. Our customers know that we have quantities that we can produce and deliver. This is what they are looking for, in addition to a reasonable price, ”added Abdelmadjid Attar. And since Israel and Egypt – countries in the Eastern Mediterranean that have recently discovered natural gas – have yet to develop a reliable transport network to Europe, they do not pose an imminent danger.
Like the selling price, the Minister was adamant about the volumes of natural gas deliveries to foreign partners.
“For Algeria, priority is the internal market. Whatever the reason, everything must be done according to the domestic market consumption forecasts. This is our number one priority. There is no question of exporting a single cubic meter at the risk of creating problems in our country ”, insisted Abdelmadjid Attar.
Africa / Asia objective
The Algerian minister acknowledged that the Covid-19 pandemic has caused a drop in prices and consumption on the world market. He was nevertheless optimistic, “natural gas still has a bright future ahead.” The projections of the experts of the Forum of Gas Exporting Countries made public on the occasion of this conference show a clear increase in consumption on an international scale. By 2050, this fossil fuel will enter 28% of the global energy mix, compared to 23% currently, and annual natural gas consumption will drop from 3,950 billion m 3 to 5,920 billion m 3.
The future of natural gas, especially liquefied natural gas (LNG), lies in Asia and Africa. “ Studies show that by 2050, consumption will grow by 99% in Asia-Pacific, 35% in North America and 147% in Africa, ” he said.
To gain market share, Sonatrach will have to increase its LNG production capacity, strengthen its means of maritime transport, and be aggressive on the commercial front, predicts the Algerian minister.
“From 2024, the share of LNG will become much larger in the markets than that of natural gas transported by pipeline. We must prepare as much for Asia as for Africa. Sonatrach is working on it. But currently, in Asia, we cannot compete with Australian and Qatari LNG ”, admitted Abdelmadjid Attar.
Asked about the project of creating a “gas OPEC,” the Algerian Minister of Energy indicated that this question had not been raised during the meeting he chaired. However, Attar believes that the establishment of such an organization under current conditions was not “ opportune ” because “ the market is marked by overproduction and a drop in consumption.”
