Скачать или смотреть ENERGY CRISIS: Europe looks to Africa(NIGERIA) to fill natural gas gap

To move away from depending on Russian energy, Europe is increasingly turning to Africa for its natural gas imports. Though the potential is there, low supply and serious bottlenecks stand in the way

Russia's invasion of Ukraine is forcing Europe to diversify its energy supply. "Germany and Europe must now quickly make up for what they have missed over the last 20 years," Stefan Liebing, chairperson of the German-African Business Association, said in a recent press release. He advised Germany's Economy Minister Robert Habeck to travel to African countries such as Algeria, Nigeria, Egypt and Angola, which could help free Europe from its dependence on Russian gas.

Algeria is the 10th-largest gas producer globally. Cargoes of liquefied natural gas — also known as LNG — exported in 2021 were largely destined for the European markets. This makes Algeria one of the top five LNG exporters to Europe

Since the outbreak of war between Russia and Ukraine, Algeria has expressed a willingness to increase natural gas exports and LNG. However, according to Alice Gower, director of geopolitics and security at London-based think tank Azure Strategy, Algeria's reserves are at rock bottom. "Earlier this year, Algeria's state-owned oil and gas group Sonatrach announced a [$40 billion, €36 billion] major investment package for a five-year period, but that doesn't mean Algeria can step in right now in the short term,".
The two lead energy operators, Spain's Naturgy and Algeria's Sonatrach, could increase the capacity of the Medgaz pipeline with little effort. The pipeline connects Algeria directly to Spain. But Algeria doesn't even have the capacity to fill it with enough Algerian gas, Gower said.

The expert said Algeria could potentially have a completely different alternative to pump more liquefied gas to Spain and Portugal with the high-capacity Maghreb-Europe Gas Pipeline (MEG).

But that pipeline runs through Morocco. Last October, political tensions between Algiers and Rabat led to the contract between Sonatrach and the Moroccan Energy Ministry not being renewed. The main problem for Algeria in this regard, according to Gower, was that Algiers did not agree to pay 10% of gas revenues as a fee to the Kingdom of Morocco, as it had in the past.

Egypt prefers China
On the other side of northern Africa, Egypt had the largest year-on-year export growth in 2021, according to a report by the Organization of Arab Petroleum Exporting Countries (OAPEC). 1.4 million tons of LNG in the second quarter compared to zero LNG exports in the same period last year. At the same time, LNG is also the only gas Egypt currently exports, as the country is not currently connected to a European pipeline network.

The gas supply situation fluctuates. "Currently, Egypt is also running out of LNG export capacity," Gower said. However, for Egypt, it is much more about the economic aspect at the moment. According to Gower, China has offered the country long-term contracts on good terms. So for Egypt, it makes sense to continue to be a reliable supplier and maintain its Chinese market share.

According to the statistics portal statista.com, Libya's natural gas reserves in 2020 amounted to around 1.4 billion cubic meters. However, the country is so politically divided that it does not even appear on the list of countries exporting to Germany.

Even if Libyan gas was available, the infrastructure is insufficient to boost exports, let alone receive the payments. Thus, Libya would drop out as a substitute supplier of Russian gas to Germany or Europe.
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