Econostrum | Economic News in the Mediterranean

The end of Russian gas in Europe reshuffles the cards in the Mediterranean

Written by Gérard Tur on Tuesday, April 5th 2022 à 09:55 | Read 365 times

In addition to the general price increase that will impact everyone, the end of Russian gas exports to Europe will penalise Italy, Greece, Serbia and Slovenia. It could also be a great opportunity for Algeria and Egypt.

Algerian gas can replace a small part of Russian gas
Algerian gas can replace a small part of Russian gas
MEDITERRANEAN. Put into practice, Vladimir Putin's threat to turn off the gas tap will impact several Mediterranean countries.
In southern Europe first of all. Serbia imports 88% of its gas from Russia, Slovenia 79%, Greece 40% and Italy 33%. At an extraordinary meeting on 30 March, the Greek government discussed alternative solutions. In order to be able to import LNG (liquefied natural gas) from Qatar, Egypt, the United States or Algeria, Greece is considering equipping its port of Athens with a floating LNG terminal. It has also asked Italy to store some of its gas in its underground depots to build up reserves before the winter. Finally, as a last resort, Greece could restart its coal production and bring back into service power plants running on this mineral.
Italy, which is heavily dependent on gas in its energy mix, is also reportedly in the process of buying two floating LNG terminals.
France, which is less dependent on Russian gas, is expected to acquire a fourth LNG terminal, probably in Le Havre.
Spain buys little Russian gas, preferring gas from Algeria, which is closer and is transported by the Medgaz pipeline.
On the southern shore of the Mediterranean, two countries with large gas reserves, Egypt and especially Algeria, should benefit from this crisis. Both will be able to sell more gas at a higher price.
For Algeria, the third largest supplier of gas to Europe (mainly Spain and Italy), it will be enough to open the tap of its two trans-Mediterranean gas pipelines, which are currently not exploited to their full capacity. The figure of 10 billion additional m3 per year seems feasible. If necessary, LNG would offer a complementary solution.
Egypt, the world's 13th largest producer, has only been exporting gas in a significant way since 2020. It has two gas-to-LNG plants. In 2021, it sold 5 million tonnes and could double this figure in 2022. 31% is exported to Italy, France and Spain.
For the record, Russia exports annually to Europe about 150 billion m3 of gas.

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