The largest gas exporter to Spain for 30 years, Algeria has just lost this status in favor of the United States. In the past two months, Spain has preferred to refuel with American liquefied natural gas, much cheaper than gas supplied by pipeline from Algerian terminals.

Falling oil prices have led to natural gas prices, but the advantage for the importing country lies in the type of fuel transport. Liquefied natural gas (LNG) transported by cargo has become more accessible everywhere than gas transported by pipeline. You should know that Russia has also exported a lot of LNG to Spain in the past two months.

According to sources close to the industry, many operators prefer to break their commitments and seek lower prices in other markets, despite the fact that they have to pay penalties.

During the first three months of 2020, Spain received in American LNG the equivalent of 20,251 GWh, against 19,748 GWh of gas from Algeria, reported the Spanish news agency El Confidential who thinks that this situation will have geopolitical implications on relations between Spain and Algeria, if it is confirmed.

This news further weakens the already delicate position of Africa’s largest gas exporter, which has decided to cut this year’s financial budget by 50%, due to the low prices of Energy. Algeria is highly dependent on energy revenues which constitute 85% of its exports.

Currently, Algeria is facing fierce competition in the market, with the United States, Qatar and Russia opposite, whose prices are more competitive.


Source: Agence Ecofin