Algeria, Europe’s third largest natural gas supplier, is planning to boost LNG and pipeline exports to the continent this year as it continues to wean off Russian supplies.

Nearly 85% of the country’s gas exports are already designated for Europe, making Algerian President Abdelmadjid Tebboune’s pledge to nearly double them to 100 billion cubic meters (Bcm), or about 3.5 Tcf, a challenge. The goal is further complicated by politics, increasing domestic consumption, pipeline constraints and the inability to fully utilize Algeria’s 30 million metric tons/year of liquefaction capacity.

Algeria’s 2022 gas production of 102 Bcm was up slightly from 100.8 Bcm produced the prior year. Those gains came after twenty years of annual production levels that hovered between 80-90 Bcm.

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If Algeria manages to increase gas production this year from 110-120 Bcm, nearly half could be used to meet domestic demand, leaving 50-60 Bcm for pipeline and liquefied natural gas exports.

Algeria consumed 45.8 Bcm of gas in 2021 and domestic demand is projected to increase 3-4 Bcm annually, according to the 2022 BP Statistical Review of World Energy.

Algeria’s 2022 gas exports declined to 49.3 Bcm from a record high of 54.6 Bcm for 2021. Algeria exported 10.2 million tons (Mt), or 12.8 Bcm of LNG last year, down from 11.94 Mt in 2021, according to Kpler.

Pipeline exports fell 7.6% to 36.5 Bcm, despite high volumes delivered to Italy. In April, Algeria agreed to provide Italy with 9 Bcm of natural gas from November 2022 until the end of 2023, in addition to previous contracts. Eni SPA plans to import an additional  7 Bcm of LNG from Algeria for the 2023-2024 winter heating season, Bloomberg reported earlier this month.

Delivery on the Maghreb-Europe pipeline to Spain and Morocco was reduced in the first half of   2021, then completely cut off in October 2021 because of political disputes between Morocco and Algeria.

Although 2022  gas exports were lower, “our commitments to our European customers have been fully met and we have delivered more than 4 Bcm of gas to customers on a spot basis.” CEO Toufik Hakkar, of Algeria’s Sonatrach, recently told news media.

William Lawrence, a professor at American University’s School of International Service who focuses on the Middle East, told NGI the reason for the export decline “is not technical but political, as Algeria does have the capacity to shift exports in other directions over time, including towards Italy, both through the pipeline and through LNG export. Exports to Italy, for example, arguably the most important client, are expected to increase by 20%.”

Earlier this month, Hakkar reaffirmed Algeria’s $40 billion investment plans for 2022-2026, which includes devoting more than $30 billion to maintain oil and gas production levels by accessing new reserves. The plan also includes investing more than $7 billion in refining, petrochemicals and gas liquefaction projects.

State-owned Sonatrach has failed to export LNG volumes close to its 29-30 mmty of nameplate liquefaction capacity as existing infrastructure needs to be upgraded and additional capacity needs to be added to absorb additional feed gas.

Construction is planned for a new LNG storage tank with 150,000 cubic meters of capacity for the 4.5 mmty Skikda plant. An update of a nearby jetty and loading facilities was announced by Sonatrach last year.

Hakkar reportedly said the plant’s loading capacities and those of the port of Skikda do not make it possible to supply larger LNG tankers.