Algeria has seen an unexpected surge in pipeline gas exports to Italy and Spain at the start of Q2 of 2016, reported Platts.
Supplies to Italy hit a new three-year high of 65.5mcm and they are up more than four-fold compared with the average flows in March, data from Platts analytics unit, Eclipse Energy, showed.
Gas exports via pipeline to Spain are up by more than 50% compared with the March average, hitting a high of 46mcum.
In the case of Italy, the higher flows are mostly at the expense of Russia, which has seen exports to Italy fall by up to 37% in April compared with the March average. In addition, Algeria is gaining gas contracts amid further decline in gas supplies to Europe from Libya. Flows via the Greenstream line from Mellitah in Libya to Italy have also dropped sharply, exports fell to as low as 2mcm, Eclipse data stated.
The sudden hike in exports could be attributed to lower LNG production, customers nominating higher because of favorable prices under long-term, oil-indexed contracts and Algeria’s own pursuit of a market share defense strategy.
The surge in gas exports suggests a positive shift in Algeria’s energy prospects in contrast to the country’s stagnating energy exports recorded in 2015, as Reuters reported earlier.
While total Algeria’s energy sales reached 100m tons of oil equivalent in 2015, unchanged from the previous year, production declined 1.3% to 153m tons of oil equivalent.
The North African OPEC member, a major gas supplier to Europe, is trying to increase oil and gas production, stagnant for a decade, but foreign oil companies remain reluctant to invest in Algeria.