ROME: The start of the second quarter of 2016 has seen an unexpected surge in pipeline gas exports from Algeria. Supplies to Italy hit a new three-year high on Wednesday of 65.5 million cu m and they are up more than four-fold compared with the average flows in March, data from Platts analytics unit Eclipse Energy showed Thursday.
And gas exports via pipeline to Spain are up by more than 50% compared with the March average, hitting a high of 46 million cu m on Tuesday. The sudden hike in exports could be attributed to a number of factors — lower LNG production, customers nominating higher because of favorable prices under long-term, oil-indexed contracts and Algeria’s own pursuit of a market share defense strategy.
In the case of Italy, the higher Italian flows are mostly at the expense of Russia, which has seen exports to Italy fall by up to 37% in April compared with the March average.
The fact that the surge in Algerian deliveries to Italy comes mostly at the expense of Russian gas — which is also linked to oil prices — suggests Algerian contract gas is currently competitive with Russian gas. But flows via the Greenstream line from Mellitah in Libya to Italy have also dropped sharply in the past days.
On Monday exports fell to just 5 million cu m, and then further again to just 2 million cu m on Tuesday, Eclipse data showed. Although flows rose back up to 8 million cu m on Wednesday, they are still well below the average Libyan exports to Italy in March of 14 million cu m/d.
It is unclear what has triggered the fall in Libyan flows — Italy’s gas network operator Snam Rete Gas confirmed Tuesday’s sharp drop to just 2 million cu m, but had no immediate comment Thursday on the cause of the decline. And there has been no sign of disruption to the facilities at the Libyan end. Nominations from Italy for Libyan gas have remained steady all week at 12-14 million cu m/d.
