Page 5 - AfrOil Week 12 2022

AfrOil COMMENTARY AfrOil

The time involved is short, as the EU has is spare [production] capacity,” he explained.
imposed a deadline of the end of this year. (And “North Africa, particularly Algeria, is already
in practice, new suppliers will be needed even a major source of gas for Europe, and there are
before December 31, as EU member states must limited supplies available. If the region can boost
begin putting gas into storage before the heating output, however, it could certainly take advan-
season begins in October.) tage of a European decoupling from Russian
Moreover, the EU will have to deal with mul- supplies and rising energy prices.”
tiple suppliers. Russia is the largest gas producer
and exporter in the world, and no other country Algeria: Focus on conventional gas
can replace it outright. Consequently, the bloc Kinnear indicated that he expected any Euro-
will need to secure gas from several different pean investments in Algeria to be channelled
sources. into conventional gas projects rather than
One logical place to search for gas is North unconventional gas projects, at least in the short
Africa. The region has some distinct advantages, term.
including: When asked whether the North African One logical place
• geographical proximity to Europe state might focus on unconventional gas in the
• the presence of one established gas exporter longer term, he expressed some reservations. for the EU to
with a track record of being a reliable supplier More specifically, he told NewsBase that Algeria
to Europe (Algeria), another gas-producing might have difficulty attracting sufficient invest- search for gas is
state that has exported gas to Europe in the past ment for shale gas projects, even in the face of North Africa
(Libya) and another gas-producing state that increased European demand, along with higher
is looking to beef up its export capacity and prices resulting from changes in global gas trade
expand its global clientele (Egypt) patterns.
• established export infrastructure linking “For Algeria, the problem with developing
North Africa to Europe, including underwater its unconventional reserves has always been
pipelines and LNG plants with export terminals that it needs the help of oil majors to carry out
But are these advantages compelling enough the necessary technical work,” he told News-
to justify the effort of seeking extra gas for Base. “Algiers hasn’t thus far been able to pro-
Europe from the region? vide the necessary incentives for investment.
Rising gas prices may help ease concerns over
North Africa: European investment needed Algeria’s complicated regulatory framework for
Hamish Kinnear, a Middle East and North the majors, but it’s no guarantee.”
Africa (MENA) analyst for Verisk Maplecroft, His reservations were not fully shared by
believes they are. He told NewsBase earlier this Ross Cassidy, the vice-president of MENA
week that the EU’s move to cut and eventually research at Welligence Energy Analytics. Cas-
eliminate Russian gas imports had the potential sidy told NewsBase last week that if the EU con-
to benefit North Africa. tinued to move away from Russia as a supplier
“Theoretically, yes,” he said. “EU consumers of fuel, Algeria’s shale gas fields might start to
require gas from somewhere to replace Russian draw more interest. But he also stated that he
exports. The geographical proximity of North did not expect any immediate movement in this
Africa and overall neutral/warm relations direction.
between the EU and North African countries “Algeria could hold large volumes of uncon-
make the region a good option.” ventional gas. However, this has not been
Kinnear also pointed out, though, that the appraised yet to determine commerciality,” he
EU could not reap the gains of this proxim- said. “Two agreements are in place with [inter-
ity effortlessly, saying that European inves- national] majors to help study the potential. This
tors would need to help cover the cost of new is not a short-term opportunity, but the current
upstream development projects. “The problem scenario may provide some momentum.”

Green Stream gas pipeline terminus (Photo: Eni)

Week 12 23•March•2022 www. NEWSBASE .com P5