Algeria: Markets speculate about gas bottlenecks

Sonatrach’s ability to supply enough gas to meet its international contracts continues to be the subject of speculation in the international markets. Sales to southern Europe have fallen sharply in recent years, mainly as a result of mutually agreed reductions in offtake. So the extent to which production bottlenecks may create greater problems for Algeria’s clients in Italy, Spain and elsewhere in Europe continues to be a matter of conjecture. However, what is certain is that pipeline exports are relatively far down Algeria’s list of priorities for gas usage. The current focus for concern over supplies is Spain. A financial source warned African Energy in early June that “infrastructure issues and local demand” might “start to impact gas exports from Algeria into Spain quite meaningfully”.