Algeria’s gas trade hinges on contract flexibility

Algeria is boosting gas production to meet its domestic demand and export obligations. Hydrocarbon exports are a vital part of Algeria’s revenue stream, accounting for more than 90% of its total export earnings. However, Algerian gas and LNG has lacked competitiveness on the international market, emphasising the need to offer more flexible contracts.

Algerian supplies will need to remain popular on the international market if the government is to realise its ambitious output plans – as the domestic sector alone cannot absorb the proposed increments in production. The country’s medium-term gas-development plan sees Algeria’s output capacity rising by 35.2 billion cubic metres per year by the end of 2019 compared with the end of 2016. If the proposed capacity is fully utilised, Algeria will produce 130 bcm of marketed gas in 2019 – an increase of 37.3% compared with the country’s 2016 output. This equates to an average year-on-year increase of around 11%.