ALGERIA LOSSES OUT TO RUSSIA IN GAS SALES

Algeria’s natural gas pipeline exports to Europe are getting squeezed by cheaper Russian supplies and a global abundance of the liquefied form of the fuel. European clients of Sonatrach have “greatly reduced their demand” for conventional gas from Algeria. This resulted in a 25% drop in the level of sales expected this year, says Ahmed El-Hachemi Mazighi, who is the vice-president of marketing at the state-owned energy company. Gas Pipeline Source : Student Energy Algeria is the third-biggest gas supplier to Europe. Its lower pipeline exports are evidence of how new LNG supplies from the U.S. to Australia and Russia are overwhelming the market and driving prices lower. That’s reduced the competitiveness of the north African country’s pipeline gas contracts, which are mostly tied to oil prices, according to the energy consultant Wood Mackenzie To compensate, Sonatrach turned more of its gas into LNG. It’s selling those supplies on the spot market for immediate delivery at a rate about a quarter higher than expected this year, Mazighi said. It’s the first time that spot sales represented 30% of the company’s LNG exports.

Sonatrach’s LNG sales are set to reach 5 billion cubic meters this year, an “historical record” over the past 20 years, and representing about 60 shipments. More than half of the company’s LNG volumes were sold in Asia.