The disruption of Qatari LNG production and exports, which constitute 20% global LNG supplies, and the shutdown of Israel’s Leviathan offshore gas field has caused considerable concern in global gas markets. But Algeria – Europe’s second largest gas supplier – holds fast. An unflappable island of stable supply.
Algeria’s reliability is due to its foreign policy, which is predicated on being friendly with everyone, but not really friends with anyone. Algeria maintains relations with any country that expresses interest in engaging with Algeria. But Algeria also avoids entering into alliances that entail obligations that could constrain its maneuverability on the international stage. Algeria is strategically aloof and that aloofness affords it tactical flexibility.
With the exception of UAE (which Algeria accurately accuses of destabilizing Sahel states from Sudan to Mali) and Israel (which Algeria views as an illegal occupier,) Algeria maintains open relations with each party impacted by the present conflict in the Persian Gulf. Algiers has maintained ties with Tehran. It has good relations with Doha. Same with Kuwait and Muscat. Algiers and Riyadh are growing closer. Commercial relations between Turkey and Algeria are flourishing. With the exception of football, Algiers and Cairo are amicable. And Algeria has sustained its open relation with Washington.
While Tehran is targeting the gamut of Gulf states and the US and Israel are lobbing salvo after salvo across Iran, Algeria isn’t implicated in any way. It doesn't owe anyone anything. Thus, despite being a Muslim MENA country, there is no threat whatsoever to Algeria’s gas exports, which continue to flow unmolested. Uninventively but unmolested.
That being said, Algeria also does not have any spare or swing capacity. It is pumping as much gas as it can through the TransMed pipeline to Italy and beyond and through the MedGaz pipeline to Spain. Its LNG train at Skikda restarted last October with a nameplate capacity of 4.5 mtpa which is marketed by Algeria’s own fleet of 9 LNG carriers.
Algeria is keen to unlock its world-class unconventional (tight) gas formations in order to tap more gas, but it is also proceeding carefully. It wants to make sure it chooses the right partner to develop its national natural patrimony for the long term. But Algeria’s slowness has discouraged some international energy companies that are accustomed to moving more quickly.
Thus, while Algeria’s circumspection in its international relations helps insulate it from international crises and conflicts, that same wariness at home has prevented it from being able to exploit those same crises and conflicts.
No doubt, Algeria will be a beneficiary of the conflict in the Middle East, much as it benefited from Russia’s invasion of Ukraine. But there is also a limit – Algeria doesn’t have the molecules to offset shortfalls in global gas supplies as a result of US and Israeli attack on Iran.
