Brussels, 09/04/2014 (Agence Europe) - Algeria will not be able to meet shortfalls in supplies of Russian gas if the Ukrainian crisis deepens.
“Some people, wishing to keep the Algerian population happy (and) in a clumsy desire to mislead them (…), are going off into prospects which are entirely without foundation”, said the Algerian academic, Dr Abderrahman Mebtoul, a renowned specialist in energy savings, in an open letter recently published in the Algerian press (our translation throughout).
Following an analysis of the Russian position on the global and European gas market, which makes this country indispensable and vulnerable at the same time, the academic asks: “What will happen with the gas giant Gazprom's threats to cut off its gas exports?”. Moscow, whose “share of the European market rose from 25.6% in 2012 to 30% in 2013, has absolutely nothing to gain economically from depriving Europe of its hydrocarbons”. A total shut-down of exports to the EU would lose Russia €75 billion and could lead to “a drop in GDP in the order of 3.7%”. At the same time, however, “Europe cannot do without Russian hydrocarbons, having imported 225 million tonnes of oil from Russia in 2013 and a good deal of gas. Eventually, this will favour the USA, where the Russian crisis will allow them to deploy their economic weapon - shale gas/oil”.
Algeria, whose “natural” outlet is Europe, has seen its market share shrink, he added, both due to security threats (attack in Tiguentourine) and, more importantly, “Europe's desire to reduce its supply to the benefit of other players on the free market, whose prices are lower”.
Dr Mebtoul points out that “European clients have asked the (Algerian) company Sonatrach to reduce its gas prices”, which also stems from the “memorandum with Europe”, which “insists on the revision of contractual clauses in the medium and long term”, on the grounds of the “disconnection between gas prices and oil prices”.
He concludes that “given the Ukrainian crisis, Algeria will only be able to make up for Europe's lack of gas partially and in the short term” (which raises the problem of Europe's gas reserves). “This necessarily raises the issue of high internal consumption” and that of “limits to reserves of traditional gas in Algeria where, in 2017, internal consumption is likely to outstrip exports by some distance”. (FB)