The Maghreb country loses a privileged position that it had held for 30 years; US gas accounts for 27% of Spanish imports

United States displaces Algeria as the leading exporter of natural gas to Spain

photo_camera PHOTO/REUTERS - Gas plant in the Permian Basin in Texas (USA)

Algeria has ceased to be the leading supplier of natural gas to Spain after 30 years. A position now held by the United States. The Maghreb country is being pushed aside at a particularly difficult time for its finances due to the continued fall in oil and gas prices. 

Last February - the latest with official data - US natural gas accounted for exactly 27% of Spanish imports - reaching 7,924 gigawatts per hour (GWh) - according to data from Cores, the Spanish corporation responsible for maintaining vital oil product stocks and controlling the hydrocarbon industry's stocks. This is the first time that the United States has reached a position of maximum privilege since there have been records, according to our country's agency.

The Algerian supplies, on the other hand, amounted to 22.6% of the total Spanish imports of natural gas in the mentioned period, according to data from the Spanish public law corporation that collect data from the Maghreb country.  

The turnaround has been forged over the last year. Between February this year and 2019 there has been a very sharp fall, of up to 38.4%, in Spanish natural gas imports from the Maghreb country. It should be remembered that in 2018 Algerian gas accounted for no less than 48.5% of what was consumed in Spain, according to data collected by the Algerian website Dzair Daily. A remarkable turnaround. 

Moreover, in February, according to data from Cores, Spanish natural gas imports showed a slight increase (+0.2%) compared with the same month in 2019, reaching 29,345 GWh. 65.8% is imported as liquefied natural gas and 34.2% via pipeline. By geographical area, imports from North America (+3,621.2%) and Central and South America (+50.4%) increased year-on-year, while supplies from the Middle East (-19.5%), Europe and Eurasia (-32.7%) and Africa (-36.3%) fell. Overall, at the African level, Spanish imports -in all categories- fell by 11.9% last February. 

Yacimiento de gas en Argelia

To explain the 'surprise' U.S. must take into account the self-sufficient energy situation of the country, given the shale gas boom, at a time when the Trump Administration has chosen to diversify their markets, spearheaded by Europe. In this sense, the Algerian digital aliqtisadia.com notes the arrival of Pedro Sanchez to Moncloa as responsible for a “re-organisation of oil supply sources”. “Between October 2018 and the same month in 2019, Spain multiplied by seven (+561%) Venezuelan crude oil imports, up to 1.82 million tons, while in the case of the United States, these increased by 58% to reach 1.4 million tons,” evokes the Maghreb environment using data from Cores. 

Algeria is currently suffering from strong competition from major gas producers (United States, Qatar and Russia) and oil producers (Saudi Arabia, United States). The fall in hydrocarbon prices, together with losses in market share such as that referred to above, is leaving the administration of the Maghreb country in a precarious situation. This Sunday, President Abdelmadjid Tebboune again regretted the dependence of the Algerian economy on hydrocarbons and insisted, in statements reported by the state news agency, on “the application of a new economic model based on the diversification of growth and the knowledge-based economy, and on developing a new manufacturing policy oriented towards small, medium and emerging industries,” as well as increasing investment in renewable energies. 

Agreement between Sonatrach and ExxonMobil

And, while the United States displaces Algeria as the leading seller of gas to Spain, its hydrocarbon companies sign a collaboration agreement: this Monday, the Algerian national hydrocarbon agency, Sonatrach, announced the signing of a Memorandum of Understanding (MoU) with the American oil and gas company ExxonMobil.

“Sonatrach and ExxonMobil have signed a Memorandum of Understanding (MoU) to participate in joint discussions on possible exploration and development opportunities in Algeria,” the Algerian company announced in a public note.

“The Memorandum of Understanding (MoU) demonstrates an interest by the parties to evaluate options for collaboration following the recent enactment of Algeria's new hydrocarbons law,” continued the statement collected by digital Algérie Eco. Sonatrach also signed two other memoranda of understanding with the Russian company Zarubezhneft and the Turkish company Turkiye Petrolleri Anonim Ortakliôi (TPAO).

Logo de la compañía estatal de energía Sonatrach en la sede de Argel
The GR7 gas pipeline starts operations

Meanwhile, earlier this month Sonatrach announced that the GR7 pipeline, designed to transport gas from the fields of the Adrar wilaya - in the southwest of the country - to the National Gas Distribution Center in Hassi R'mel, had begun operations. “The work has been carried out in very favourable conditions. The project has been carried out in order to receive supplies from the new South-West fields (Hassi Mouina Sud & Nord and Hassi Ba Hamou) and transport them to the Gaz de Hassi R'mel National Distribution Centre (CNDG),” explained the state company. 

The gas pipeline GR7 - which is 344 kilometers long - is the result of a 100% Algerian consortium: “The construction was totally entrusted to Algerian companies, in this case COSIDER Canalisations and ENAC. The pipes for the construction of this facility were manufactured by ALFAPIPE and the control and monitoring of the manufacturing process was carried out by GTP”.

“The capacity of this gas pipeline is 4 billion standard cubic meters per year and will increase Sonatrach's natural gas capacity in the transport system of the Reggane - Hassi R'mel gas pipeline (GR5) to approximately 13 billion standard cubic meters per year,” concludes the note from Sonatrach.

More in Economy and business