North Africa has become an increasingly important region for natural gas production and reserves over the last few decades. Countries like Algeria, Libya, and Egypt hold substantial proven reserves of natural gas and have invested heavily in exploration, production, and export infrastructure.
With demand for natural gas rising globally, North Africa is well-positioned to export natural gas to Europe, Asia, and other regions. However, development of gas reserves and production capacity continues to face some challenges in parts of North Africa due to political instability, security issues, and uncertain investment climates.
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Overview of Natural Gas in North Africa
Natural gas plays a pivotal role in the energy mix for most North African countries. It is used extensively for power generation, supporting industry and manufacturing, and also as a feedstock for petrochemical plants. Domestic consumption has risen rapidly in recent years, at the same time that countries have sought to monetize reserves through export projects.
Algeria, Libya, and Egypt account for the bulk of proven natural gas reserves in North Africa. Algeria has by far the largest reserves at 159 trillion cubic feet (Tcf), followed by Libya at 55 Tcf and Egypt at 77 Tcf. Other countries with modest reserves include Tunisia and Morocco.
Here is a comparison of proven natural gas reserves for the major North African countries:
| Country | Proven Natural Gas Reserves (Tcf) | Global Rank |
|---|---|---|
| Algeria | 159 | 9th |
| Libya | 55 | 21st |
| Egypt | 77 | 16th |
| Tunisia | 2.5 | 64th |
| Morocco | 1.2 | 77th |
Algeria is the largest natural gas producer in the region and 3rd largest exporter globally behind Russia and Qatar. Egypt’s production has declined in recent years, but it remains an important regional gas producer. Libya produced a sizable amount prior to the 2011 civil conflict but output has been very limited since then due to chronic instability.
Several major gas pipeline projects have been built to export North African gas to Europe and Turkey, including the Trans-Mediterranean Pipeline from Algeria to Italy, Greenstream from Libya to Italy, and the Arab Gas Pipeline from Egypt to Jordan, Syria, and Lebanon. Egypt has large LNG export facilities on the Mediterranean coast as well.
Algeria’s Natural Gas Sector
Algeria has focused heavily on natural gas production and exports since the later decades of the 20th century. The country’s major gas fields were discovered between 1956 and 1978. The government established Sonatrach as the national oil and gas company which has overseen gas development together with foreign investors.
Most of Algeria’s major gas deposits are located in basins in the southern and southeastern parts of the country like Ahnet, Adrar, Illizi, and Tinrhert. There are also sizable reserves in the Berkine basin which extends from southern Algeria into Tunisia.
By 2020, Algeria’s gross natural gas production reached 125 billion cubic meters, of which 103 bcm was marketed production. Around 60% of gross production is re-injected to boost recovery from oil wells. The country has 12 LNG trains at four coastal facilities with combined liquefaction capacity of 44 bcm per year.
Algeria exported 57 bcm of natural gas in 2020. The largest export route is via pipeline to Italy which accounted for 26 bcm. LNG exports were approximately 24 bcm with key markets in Europe and Asia. Domestic gas consumption has risen rapidly, hitting 43 bcm in 2020, due to economic development and population growth.
Several new gas fields and infrastructure projects are underway to help Algeria maintain export volumes in the coming decade. The government aims to increase pipeline exports to Southern Europe and reduce dependency on oil and gas revenue over the longer term by expanding the economy.
Egypt’s Natural Gas Sector
Natural gas production and consumption has grown substantially in Egypt since the 1990s. Proven reserves tripled between 2000 and 2010 aided by major offshore discoveries in the Mediterranean Sea. However, declining investment, infrastructure limitations, and domestic demand growth have reduced export capacity.
Most of Egypt’s gas production comes from the Nile Delta and Mediterranean coast sections of the country. The offshore North Alexandria and West Mediterranean Deepwater concessions operated by BP and Eni have been the source of recent major finds like the Nooros, Atoll, and Zohr fields.
Production reached a peak of 61 bcm in 2009 before declining. In 2020, Egypt produced 59 bcm of gas, mostly from the Western Desert, Nile Delta, Gulf of Suez, and Mediterranean regions. The Zohr field alone produces up to 28 bcm annually. Around 18 LNG trains have liquefaction capacity of 19 bcm/year, although exports have dropped.
Domestic consumption, meanwhile, has risen from just 12 bcm in 2000 to over 61 bcm in 2020. This is due to economic growth, subsidies that encouraged gas usage, and displacement of oil in the power sector. Most experts believe Egypt’s gas production will struggle to keep up with domestic demand going forward.
To boost production, Egypt has slashed subsidies and introduced market pricing to attract foreign companies. Development of recent discoveries along with exploration of the Nile Delta Deepwater concession may help slow decline in the next decade. But Egypt will remain a net importer of gas for the foreseeable future.
Libya’s Natural Gas Production
Libya has the largest proven natural gas reserves in Africa. Prior to the 2011 civil war, Libya produced 15-20 bcm of gas annually, mostly from fields in the onshore Sirte basin and offshore in the Mediterranean. About 20% was exported to Europe via the Greenstream pipeline to Italy.
However, Libya’s gas production and exports have been severely reduced since 2011 due to conflict-related damage to infrastructure as well as ongoing political divisions. Gas facilities have frequently faced blockades, forcing shutdowns. In 2020, annual production was just 6.5 bcm.
Libya’s National Oil Company (NOC) hopes to raise gas production to 14 bcm by 2025 if the security situation improves and international oil companies resume exploration activities. Repairs to infrastructure and securing blockaded facilities are NOC’s top priorities.
Most of Libya’s gas reserves (about 80%) are located in the Sirte Basin. Other fields lie in the Murzuq basin near the Algerian border and the offshore Tripolitania basin. Libya also shares some fields with Tunisia like the Wafa field in the Pelagian Platform offshore concession.
The uncertain operating environment and risks from conflict continue to hinder the growth of Libya’s natural gas sector. But the vast reserves and proximity to Europe mean it could eventually become a major gas supplier if stability improves. Companies like Eni, BP, and Total maintain an interest despite the challenges.
Comparison of Natural Gas Reserves and Production
Here is a summary comparison of natural gas reserves and recent annual production levels in the three major North African countries:
| Country | Proven Reserves (Tcf) | 2020 Production (bcm) | % of Regional Production |
|---|---|---|---|
| Algeria | 159 | 125 | 57% |
| Libya | 55 | 6.5 | 3% |
| Egypt | 77 | 59 | 27% |
| Total | 291 | 190.5 | 87% |
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Algeria accounted for over half of North Africa’s natural gas production in 2020, nearly twice that of Egypt. But Egypt’s output is down sharply from its 2009 peak.
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Despite holding about 20% of North Africa’s reserves, Libya contributed only 3% of regional production in 2020 due to its conflict-driven supply disruptions.
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Taken together, the big three countries accounted for 87% of North Africa’s gross natural gas production in 2020. But reserves are not necessarily indicative of current production levels.
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Algeria clearly leads both in reserves and current production. Its pipeline infrastructure and LNG facilities have allowed it to monetize reserves more effectively than Egypt and Libya recently.
Outlook for North African Natural Gas Exports
North Africa’s natural gas exporting capacity has fallen short of potential in the last decade. But its proximity to major European markets and vast reserves mean it is well positioned to meet demand once political and security issues are resolved.
Algeria is focused on maintaining exports, which make up around 25% of government revenue. Production from new southern fields and shale gas resources could help keep exports stable at 40-50 bcm per year. But domestic demand growth is strong.
Egypt is unlikely to resume significant LNG exports given its growing domestic consumption. But production from recent offshore finds like Zohr may slow import growth. Egypt could remain a net importer of 5-10 bcm annually going forward.
Libya’s exports depend foremost on restoring security and political unity. If infrastructure blockades cease and oil companies return to developing gas reserves, exports to Europe could eventually reach 20 bcm annually again via the Greenstream pipeline and an unfinished LNG plant.
New gas finds in Mauritania/Senegal, Cyprus, and Israel could also boost North Africa’s export capacity in the coming decade as those reserves are developed. With Algeria’s exports expected to decline slowly after 2030, these emerging gas provinces will play a key role in meeting European demand.
Frequently Asked Questions
How much natural gas does North Africa have in total reserves?
North Africa has around 291 trillion cubic feet (Tcf) in proven natural gas reserves. The vast majority is located in just three countries – Algeria with 159 Tcf, Libya with 55 Tcf, and Egypt with 77 Tcf. These account for about 87% of the region’s reserves.
What country is the biggest natural gas producer in North Africa?
Algeria is by far the largest natural gas producer, accounting for 57% of North Africa’s production in 2020. It produced 125 bcm of gross gas output that year. The next biggest is Egypt at 27% (59 bcm) followed by Libya at just 3% (6.5 bcm) due to its conflict situation.
Where are Algeria’s main natural gas fields located?
Algeria’s major gas fields are mostly located in basins in the southern, southeastern, and central areas of the country. The Illizi, Adrar, Ahnet, Timimoun, In Salah, and Berkine basins hold the giant oil and gas fields that provide the bulk of Algeria’s production.
How much natural gas does the Zohr field produce in Egypt?
The offshore Zohr gas field in Egypt’s Mediterranean waters is the largest gas discovery ever made in the Mediterranean. It came online in 2017 and now produces between 25-28 billion cubic meters per year, accounting for nearly half of Egypt’s total gas output.
What is Libya’s potential for natural gas exports to Europe?
Prior to 2011, Libya exported around 15 bcm of gas to Europe annually via the Greenstream pipeline to Italy. With over 55 Tcf in reserves and proximity to Europe, exports could eventually reach 20 bcm per year again if political instability and conflict is resolved. But security issues continue to hinder Libya’s gas sector potential.
How is North African natural gas exported to world markets?
There are several major gas pipeline routes from North Africa to Europe, including the Trans-Med pipeline from Algeria to Italy, Greenstream from Libya to Italy, and the AGP pipeline from Egypt to Jordan, Syria and Lebanon. Algeria and Egypt also have sizeable liquefied natural gas (LNG) export capacity that connects them with Europe and Asian markets.
What is the outlook for North African natural gas exports?
Algeria is expected to remain a major gas exporter but face a slow decline after 2030. Egypt is unlikely to resume significant LNG exports given rising domestic consumption. Libya could restore pipeline exports to 20 bcm if stability and security is established. Mauritania/Senegal, Cyprus, Israel are emerging gas provinces that could also boost North Africa’s export capacity this decade.
What are the largest natural gas fields in Egypt?
The two supergiant natural gas fields in Egypt are the Nile Delta’s Burullus and North Alexandria fields, with estimated reserves of 30 Tcf and 25 Tcf respectively. Other major fields include Temsah, WDDM Concession, and the offshore Ras el Barr and Atoll fields.
How much investment is required to develop North Africa’s natural gas reserves?
Algeria estimates around $60 billion of investment is needed over the next decade to develop new reserves, maintain production, and expand/upgrade its export infrastructure. Egypt requires over $10 billion to stem production declines. Libya needs $60 billion but the security situation has deterred investment.
What challenges does the natural gas sector face in North Africa?
Political instability, security threats, red tape, gas shortages for domestic industries, and delays to projects are key challenges. Attracting foreign investment and technology has also been an issue outside of Algeria. Subsidy cuts and market pricing reforms aim to incentivize production.
Which companies are the major players in North Africa’s natural gas sector?
Algeria’s Sonatrach dominates along with foreign partners like Total, Eni, BP, and Equinor. Egypt’s production is led by state company EGAS, as well as Eni, BP, Total, Shell, and Petronas among others. In Libya, the NOC and foreign firms like Eni, Total, Repsol, OMV, and Occidental are important players.
How has the Ukraine conflict impacted North Africa’s natural gas sector outlook?
The conflict has increased Europe’s need to diversify from Russian gas imports long-term, which may benefit North African exporters. But investment uncertainty, supply chain issues, and rising project/operating costs due to inflation may negatively impact the sector’s outlook.
What role will shale gas play in North Africa’s future production?
Algeria has sizable shale gas resources that could support increased production if developed. Libya also has potential. But shale gas drilling has been slow to take off in the region thus far. More investment and technical expertise is required to tap this unconventional resource on a wide scale going forward.
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Conclusion
North Africa has emerged as a globally important center for natural gas production, reserves, and export potential in recent decades. However, realizing its full potential has been hampered by political instability, security threats, investment uncertainty, and rising domestic demand in key countries.
The region held proven reserves of over 290 trillion cubic feet as of early 2022 – with Algeria, Libya and Egypt accounting for the vast majority. Production has been dominated by Algeria, although its exports may begin declining after 2030. Egypt’s gas sector has been hampered by rising consumption and stalled LNG exports. Libya’s gas potential has been severely impacted by chronic conflict and unrest.
Looking ahead, North African gas exporters will play a pivotal role in helping Europe diversify its supply sources and meet increasing import demand. But reaching the level of exports achieved in the 2000s will require billions in investment and resolving security issues that deter foreign companies. Developing recent offshore discoveries and unconventional shale gas represent upside potential.
Maintaining export revenues will remain a priority for governments – especially Algeria where oil and gas accounts for over 90% of total exports. However, managing high domestic consumption growth will be crucial to preserving export capacity. The region’s progress in developing gas reserves into production and export earnings will be an important trend to monitor going forward.
