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    Algeria Increases Gas Exports by Pipe

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Summary

Algerian state Sonatrach exported 8% more oil and gas in January-August 2016 year on year, with gas exports by pipe increasing sharply.

by: Mark Smedley

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Natural Gas & LNG News, Africa, Europe, Corporate, Exploration & Production, Infrastructure, Liquefied Natural Gas (LNG), Pipelines, News By Country, Algeria, Italy

Algeria Increases Gas Exports by Pipe

Algerian state producer Sonatrach exported 71.5mn tons of oil equivalent (or 2.15mn boe/day) in the first eight months of 2016, up 8% on the same period of 2015, it said in a communique reported by state news agency APS on September 3.

Whereas crude oil exports declined by 8% over the same period, owing to increased refining runs in northern Algeria’s refineries to satisfy growing domestic product demand, gas exports increased sharply.

Sonatrach’s gas exports by pipeline increased by 43% in January-August 2016, relative to the first eight months of last year, and were 12% above the company’s own target. Much of the increase in gas exports was in the first three months – the traditional winter period.

Sales to Italy by pipe in January-June 2016 were 3bn m³ higher than in 1H 2015, Sonatrach noted.

The Tunisian section of the Trans-Mediterranean pipeline being laid in 1973 in order to enable Algerian gas to flow subsea to Italy (Photo credit: Eni)

“The increase in gas exports by pipeline confirms Sonatrach’s repositioning on the European market,” the company’s statement continued. It also noted a significant rise in gas production in July and August 2016, following the restart of the In Amenas gas processing train 3 on July 27, which had been originally expected in April 2016.

The APS report gave no indication of how Sonatrach’s LNG exports had fared, year on year. It's likely that the company switched gas volumes from the poorly-priced international spot LNG market – where prices are sub-$6/mm Btu into northeast Asia and sub-$5 into Europe – to its slightly higher-value, contract-based, European piped gas market.

However it reported that Algeria’s primary oil and gas production reached 127.4mn toe in the first eight months of 2016 (3.83mn boe/d), or 99% of the target set by Sonatrach.

Newspaper Liberte added that, according to customs data, Algerian total gas and oil export value fell by 32% in January-July 2016, compared with the first seven months of 2015, despite the increased volumes exported. Russian exporter Gazprom also reported a major increase in exports to Europe this year with a drop in profitability as prices are down.

 

Mark Smedley