Natural gas is one of Algeria’s most abundant natural resources. With a capacity of 2.3 trillion cubic meters as of 2020, the country’s
are among the largest worldwide. Natural gas production stood at around 85 billion standard cubic meters in the same year, making Algeria the
in Africa. After the extraction and production processes, natural gas is mainly exported or used domestically for power generation.
Export trade mainly via pipelines
Algeria’s
natural gas export was approximately 41 billion cubic meters in 2019. Due to stagnating production levels, lack of infrastructure, and fluctuating external demand, the exports registered an annual decline from 2016 onwards. Algeria exports most of its production in a gaseous state via the pipelines that connect North Africa to Europe. The
main destinations are Italy and Spain, which account for around 56 percent and 40 percent of the export trade, respectively. In addition, a smaller part of the natural gas produced in Algeria is liquefied to facilitate transportation and therefore traded via ships. The
export of Liquefied Natural Gas (LNG) reached a total of 15 billion cubic meters in 2020, decreasing from around 17 billion cubic meters in the previous year.
Domestic gas consumption on the rise
The
use of natural gas in Algeria has been generally increasing in recent years, reaching around 1,078 standard cubic meters per capita in 2019. Natural gas in the country is mainly used for power generation and residential purposes. In particular, it represents the source of over half of the energy produced and consumed in Algeria. Despite declining in 2020 due to the coronavirus (COVID-19) pandemic, annual
domestic consumption rose significantly from 2010 onwards.
A key economic contributor
The natural gas industry is an important contributor to Algeria’s Gross Domestic Product (GDP). In 2019,
natural gas rents in the country accounted for roughly two percent of the economy. Algeria’s
large industrial sector, which contributed around 34 percent to the GDP in 2020, relies on oil and gas resources. Characterized by a dependence on hydrocarbons, including their volatile prices and trade, the country's economy is threatened by lack of diversification.
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