Hakim Darbouche: Natural Gas in North Africa: Upstream, Demand, export policies, and the issue of domestic pricing.

North Africa is increasingly seen in Europe as a source of natural gas that has the potential to alleviate its dependence on Russian supplies. However, no detailed analysis of the outlook for gas exports to Europe from Algeria, Egypt and Libya is available in the public domain. This study aims to fill this gap. It is divided in two parts. The first paper will provide an overview of the North African gas markets. It will dissect individual producers’ foreign investment policies, the characteristics of their upstream gas business, the projected trajectories of domestic demand growth and their downstream priorities, as well as their export policies and prospects. The aim of this paper is to shed light on the differences in gas markets between the North African producers and, most importantly, to assess the main challenges and dilemmas they all face. It will focus on the issue of “resource nationalism” and investment terms, export routes/markets, and the problématique of domestic gas pricing. The second part of the study will focus on the issue of domestic gas prices.

It will investigate 1/ the economic and commercial costs incurred by North African gas producers for maintaining artificially-low gas prices for the downstream segments of their markets; 2/ the political-economy rationale behind the price management policies of North African governments; 3/ the feasibility of introducing some sort of domestic gas price liberalisation in light of the existing socio-political conditions and the most likely outlook’s implications for North African gas exports.

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