Sonatrach clarifies timeline for gas exports cut

Algeria's Sonatrach expects a sharp reduction in aggregate gas exports to take place from 2030 onwards, having suggested earlier this week that this could happen from 2025.

Proven reserves at present and the expected increase in domestic consumption are still expected to limit the country's export potential in the second half of this decade, but aggregate exports may only need to fall to 25bn-30bn m³/yr from 2030 onwards, the country's energy minister Abdelmadjid Attar, a former Sonatrach chief executive, said. The minister had previously suggested that exports would have to fall to 26bn-30bn m³/yr in 2025-30, and possibly further down to 20bn-30bn m³/yr from 2030.

Aggregate Algerian exports — including pipeline gas and LNG — reached 40.9bn m³ in 2019, figures from the Joint Organisation Data Initiative (Jodi) show.

Previous estimates of a sharper reduction in the second half of this decade could have cast doubts on the company's ability to honour its long-term supply agreements, some of which were recently renewed. Italian energy firms Eni, Enel and Edison have all renewed their contracts with Sonatrach until 2027, with the option to extend them for two more years, although it was unclear what volumes the Algerian firm has committed to supply. The contract with Eni may be for around 10bn m³/yr, judging by comments the Italian firm made at the time of the renewal, but Enel has not disclosed the contractual volume. The contract with Edison is for 1bn m³/yr.

Sonatrach also supplies pipeline gas to Spanish firms, as well as LNG to several companies including Enel, Spain's Cepsa, Greece's Depa, Turkey's Botas and France's Total, although the existing LNG export contracts are set to expire by 2024.

That said, Algeria intends to bolster its export potential beyond 2030 by increasing exploration activities, improving recovery rates and exploring the possibility of extracting shale gas, Attar said. Algeria is estimated to hold 707 trillion ft³ (20 trillion m³) of shale gas, Sonatrach previously said, one of the largest shale gas reserves in the world.

By Ellie Holbrook