TUNIS: Damage to Gulf energy infrastructure in the West Asia war has turned attention to Algeria and Libya as possible fallback oil and gas suppliers, but both have little room to ramp up output in the short term, experts say.
Since the conflict erupted last month with US-Israeli strikes on Iran, the Islamic republic has kept up retaliatory fire on Israel and Gulf nations, including attacks on oil and gas facilities.
The resulting concerns of a global energy supply shock have turned eyes towards Algeria, an oil producer and OPEC member that is also Africa's leading gas exporter.
Unlike Qatar, which exports liquefied natural gas (LNG) by tanker, Algeria relies primarily on gas pipelines: the TransMed to Italy and the MedGaz to Spain.
Combining land-based and underwater sections, they offer "a significant advantage" because "they are out of reach for Iran and Hezbollah's drones and missiles", Moez Ajmi, an energy analyst at the EY consulting firm, told AFP.
But they are already operating at full capacity.
Gas pipelines are "excellent alternatives in terms of security and insurance premiums, but there are structural limitations", said Geoff Porter, an analyst with North Africa Risk Consulting. "There is some spare capacity in MedGaz (maybe 1 billion cubic metres per year), but there is no extra capacity in TransMed," he told AFP.
Since Russia's invasion of Ukraine in 2022 and the EU's move to phase out Russian gas imports, the North African country has become a key supplier to Europe and "an essential pillar of its energy diversification strategy", Ajmi said.
Italy's energy minister Gilberto Pichetto Fratin said Friday that he was in direct talks with Algeria, Azerbaijan and the United States in a bid to offset the loss of Qatari LNG, which covers 20 percent of Italy's demand.
However, even with vast proven reserves exceeding 4,500 billion cubic metres, Algeria -- whose other major European customers are Germany and France -- cannot compete with the Gulf giant.
"Replacing Qatar, which produces double that of Algeria -- 200 billion cubic metres per year versus 100 -- is not realistic in the short-term without massive investment," Ajmi said.
Porter added: "Algeria does not have enough spare gas production to serve as an alternative to lost Qatari volumes."
'Major obstacle'
Still, Algiers has launched an ambitious investment plan of $50 to 60 billion to boost exploration and modernise energy infrastructure, aiming to double its gas production to 200 billion cubic metres by 2030.
This includes exploring shale gas deposits in the southern desert, which are "among the largest in the world" and "a major strategic asset" for Algeria, according to Ajmi.
Negotiations are underway for US companies Chevron and ExxonMobil to bring in capital and technical expertise.
But for Porter, the talks "are not at an advanced enough stage to play a decisive role in the current crisis", adding that it will take "another four-five years at best" to see any real increase in output.
On the oil front, Algeria exports nearly one million barrels per day (bpd), but production growth is "dependent on the discovery of new fields", said Ajmi. Domestic consumption needs and OPEC quotas have also slowed export ambitions.
Experts believe that Libya, which has considerable gas resources and Africa's largest oil reserves at around 48.4 billion barrels, has strong potential.
"Libya can increase its production and exports to partially offset the drop from the Gulf," Ajmi said, adding however that "political and security instability remains a major obstacle".
Libya is divided between a UN-recognised government based in Tripoli and a rival eastern administration backed by strongman Khalifa Haftar.
For that reason, Libya "can't serve as an immediate replacement" for the Gulf countries, Ajmi said.
Although production has reached 1.4 million bpd, he said it will still take several years of investment in infrastructure, drilling and security to reach the official target of 2 million bpd.