BAKU, Azerbaijan, April 20. Unattractive upstream investment conditions, regional politics, social instability, security issues and the need to meet domestic demand are problematic themes which run across the region, limiting North Africa’s capacity to respond to Europe’s call for more non-Russian gas, Trend reports with reference to the outlook of Global Voice of Gas.
Europe has four gas pipeline connections with North Africa, all with spare capacity, although one, the 11-bcma Medgaz, which runs from Algeria to Spain via Morocco, was closed in November after Algeria severed diplomatic relations with Rabat. The second Algeria-Spain pipeline, the 12 bcma Maghreb-Europe line, is sufficient to meet Spanish demand for Algerian gas.
In any case, the utility of either pipeline in serving the rest of Europe is limited by distance and the lack of transmission infrastructure from the Iberian peninsula to the rest of Europe, despite improvements in recent years. The 10.5-bcma Greenstream pipeline from Libya to Italy is currently under-used, but increases in supply would need political stabilisation in Libya to allow the repair of upstream assets and new investment. Although European majors TotalEnergies and Eni have both said they are prepared to invest in the country, a return to pre-conflict levels of gas production and exports in the short term cannot be relied upon.
The most promising prospect is the 33.5 bcma TransMed pipeline, which runs from Algeria via Tunisia to Sicily and from there to mainland Italy, traversing nearly the entire length of the country to end in Slovenia. However, while the pipeline has substantial spare capacity, estimated at 41mn m3/d in fourth-quarter 2021, Algeria has also to meet a post-pandemic rebound in domestic gas demand, which has returned domestic gas consumption to its former high levels of growth. While Algeria can boost gas pipeline exports to Europe this year to some degree, they are likely to fall short of TransMed’s spare capacity. There have been a number of proposals for new pipelines, for example the Galsi pipeline from Algeria to Italy, the Trans-Saharan gas pipeline, which would originate in Nigeria, and more recently the East-Med pipeline. However, existing spare capacity shows that the problem is not principally transmission capacity from North Africa.
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