Algeria compensates for Medgaz maintenance with higher LNG sales

Algeria is increasing its exports of liquefied natural gas (LNG) following maintenance work on the Medgaz pipeline, temporarily reducing flows to Spain while optimizing sales in the Mediterranean.

Partagez:

Since the start of maintenance work on the Medgaz pipeline linking Algeria and Spain, the flow of gas through this subsea infrastructure has fallen sharply.
Volumes fell from 28 million cubic meters per day in the first two weeks of September to just 13 million cubic meters per day from September 15.
This reduction is due to scheduled inspection work, scheduled to last until September 27.
Despite these disruptions, Algeria has managed to maintain an active presence on the European gas market.
Faced with this reduction, Algeria redirected its sales by increasing LNG exports, thus compensating for the lack of flows to Spain.
In September, Algerian LNG exports already reached 700,000 metric tons, up from 450,000 tons in August.
This development demonstrates Algeria’s flexibility in managing export flows, enabling it to maintain its energy deliveries to Europe, a key market.

Mediterranean market: an opportunity for Algerian LNG

Demand for LNG in the Mediterranean region remains strong, and Algeria is taking advantage of this momentum to offer more Free-On-Board (FOB) cargoes.
Sales to the Eastern and Western Mediterranean have already been reported for September and October, at competitive prices.
FOB cargoes allow buyers to take charge of transport, offering greater flexibility in inventory and contract management.
Algeria’s strategic location, close to European markets, gives its LNG exports an advantage in terms of logistics costs.
A cargo from the port of Arzew takes two days to reach Barcelona, compared with 14 days for a cargo from the Freeport terminal in the United States.
This proximity enables Algeria to respond rapidly to demand from European markets, reducing transport times and costs, particularly in a context of falling sea freight rates for LNG.

A pricing strategy adapted to market conditions

At the same time, LNG prices at Mediterranean hubs remain above contractual levels, which favors Algerian sales.
Algeria applies a pricing policy based on a “cocktail” of mechanisms, including components indexed to the price of oil.
Long-term contracts often include a percentage of the crude price, known as a “slope”.
Currently, traders estimate that this slope fluctuates between 12% and 13.5%, reflecting market conditions.
Algerian LNG cargoes thus benefit from competitive prices on the international market.
For example, contracts indexed to 12% Brent reach around $9.19/MMBtu, while a 13.5% slope sets the price at $10.33/MMBtu.
These advantageous conditions support exports to the Western and Eastern Mediterranean hubs, where current prices offer a premium of 70 to 99 cents/MMBtu over oil contracts.

Flexibility and adaptation in Algerian exports

Algeria has been quick to adapt its export strategies in the face of Medgaz pipeline maintenance, increasing its LNG sales to maintain its influence on the European market.
Since the work began, several additional cargoes have been shipped to strategic destinations in the Mediterranean, notably Spain and Italy.
This flexibility demonstrates the country’s ability to respond to fluctuating energy market needs, while maintaining strong commercial ties with its main European customers.
What’s more, falling freight rates on short sea routes make Algerian offers even more attractive.
In September, the freight cost for a shipment from Algeria to Southern Europe was 21 cents/MMBtu, well below the levels observed the previous year.
This reduction in logistics costs comes on top of the structural advantages linked to the country’s geographical proximity to its main export markets, enabling Algeria to maximize its revenues while maintaining increased competitiveness in the LNG market.

Outlook for the Algerian LNG market

The outlook for Algeria’s LNG business remains positive, with exports set to continue growing over the coming months.
Maintaining attractive LNG prices, combined with the flexibility of Algerian offers, ensures the country a prime position among natural gas suppliers to Europe.
This privileged position is further strengthened by Algeria’s ability to adjust its sales according to market needs and logistical constraints, particularly at times when key infrastructures such as the Medgaz pipeline are undergoing maintenance work.

The increase in oil drilling, deepwater exploration, and chemical advances are expected to raise the global drilling fluids market to $10.7bn by 2032, according to Meticulous Research.
Enbridge Gas Ohio is assessing its legal options following the Ohio regulator's decision to cut its revenues, citing potential threats to investment and future customer costs.
The European Union extends gas storage regulations by two years, requiring member states to maintain a minimum fill rate of 90% to ensure energy security and economic stability amid market uncertainties.
Energy Transfer strengthens its partnership with Chevron by increasing their liquefied natural gas supply agreement by 50% from the upcoming Lake Charles LNG export terminal, strategically aiming for long-term supply security.
Keranic Industrial Gas seals a sixty-day exclusivity deal to buy Royal Helium’s key assets, raise CAD9.5mn ($7.0mn) and bring Alberta’s Steveville plant back online in under fifteen weeks.
The Irish-Portuguese company Fusion Fuel strengthens its footprint in the United Arab Emirates as subsidiary Al Shola Gas adds AED4.4 mn ($1.2 mn) in new engineering contracts, consolidating an already robust 2025 order book.
Cheniere Energy validates major investment to expand Corpus Christi terminal, adding two liquefaction units to increase its liquefied natural gas export capacity by 2029, responding to recent international agreements.
A study by the International Energy Agency reveals that global emissions from liquefied natural gas could be significantly reduced using current technologies.
Europe is injecting natural gas into underground storage facilities at a three-year high, even as reserves remain below historical averages, prompting maximized imports of liquefied natural gas (LNG).
South Korea abandons plans to lower electricity rates this summer, fearing disruptions in liquefied natural gas supply due to escalating geopolitical tensions in the Middle East, despite recent declines in fuel import costs.
Russia positions itself to supply liquefied natural gas to Mexico and considers expanded technological sharing in the energy sector, according to Russian Energy Minister Sergey Tsivilyov.
Israel has partially resumed its natural gas exports to Egypt and Jordan following a week-long halt due to the closure of two major offshore gas fields, Leviathan and Karish.
Nepal reveals a significant potential reserve of methane in the west of the country, following exploratory drilling conducted with technical support from China, opening new economic prospects.
Petronas formalizes a memorandum with JOGMEC to secure Japanese LNG deliveries, including a first cargo from LNG Canada scheduled for July at Toho Gas.
Belgrade is currently finalising a new gas contract with Russia, promising Europe's lowest tariff, according to Srbijagas General Director Dusan Bajatovic, despite Europe's aim to eliminate Russian imports by 2027.
TotalEnergies and QatarEnergy have won the Ahara exploration licence, marking a new stage in their partnership with SONATRACH on a vast area located between Berkine and Illizi.
After four years of interruption due to regional insecurity, TotalEnergies announces the upcoming resumption of its liquefied natural gas project in Mozambique, representing a $20bn investment.
The French group has acquired from PETRONAS stakes in several licences covering more than 100,000 km² off Malaysia and Indonesia, consolidating its Asian presence and its exposure to the liquefied natural gas market.
In response to rising summer electricity consumption, Egypt signs import agreements covering 290 shipments of liquefied natural gas, involving major international firms, with financial terms adjusted to the country’s economic constraints.
Egyptian fertilizer producers suspended their activities due to reduced imports of Israeli gas, following recent production halts at Israel's Leviathan and Karish gas fields after Israeli strikes in Iran.