Natural gas, particularly LNG, is the least polluting fossil energy. It is acclaimed worldwide as a resource with a key role in the energy transition. The gas sector is growing faster than that of oil, reaching 26% of energy demand by 2050.
Algeria is one of the largest producers in the world. The country has invested in this sector to increase its production and gain more market share at the global level, particularly in Europe. In recent months, Algeria has signed several contracts and launched new deposits. It has become the largest LNG exporter in Africa, overtaking Nigeria in 2023.
It must be said that gas is the energy that is making increasing progress around the world. A recent report from the oil company Shell, devoted to the prospects for the global LNG market by 2040, expects growth of 50% boosted mainly by Chinese, European, and African demand. The report also indicates that Algeria, Qatar, and Saudi Arabia will be the largest players in the global LNG market over the next 16 years.
This growth of the gas market is indeed a boon for Algeria which has a subsoil that is full of this energy. Algerian gas intended in particular for Europe is in high demand in this context of the war in Ukraine. Coveted by Europe to replace the Russian gas supply, Algeria finds itself at the center of interest of the powers of the old continent.
At the end of January of the current year, the Algerian hydrocarbon giant Sonatrach signed, with the British company Grain LNG, an agreement that aims to consolidate the United Kingdom’s supply of LNG, for a period of ten years, starting in January 2029.
Algeria facing a real boon in the LNG market
The same group and the German company Handel & Vertrieb GmbH (VNG), a subsidiary of VNG AG, concluded a medium-term gas supply contract at the beginning of February 2024. It also intends to sign several contracts in the field gas industry by the end of the current year, with major global oil groups.
The report from the oil company Shell, it states that “the long-term LNG contracts that Europe has signed so far will not close the gap between supply and demand for the rest of the decade ”, indicating that there is “a structural shortage of 50 to 70 million metric tons per year for the rest of the decade or more, which Europe must ensure”.
This report therefore confirms that the situation should be favorable to “Algeria, Qatar, and Saudi Arabia, all of which are today major LNG exporters, due to uncertainties regarding American investment in the continued development of the LNG sector”.
It must be said that to meet growing demand in the international LNG market, Algeria has now taken the lead by developing its port infrastructure, notably the largest LNG port in Algeria, Skikda, to allow the loading of large LNG carriers with a transport capacity of 220,000 m³, while giving central importance to the production sector.
