FEATURE: MENA LNG market share persists in 2023 despite wavering exports

Despite global risk factors, LNG exports from the Middle East and North Africa have remained strong in 2023, with exports from both regions making up nearly one-third of global LNG exports this year.

So far this year, global LNG exports are at 392 million mt, with the Middle East and North Africa exporting around 108 million mt, according to data from S&P Global Commodity Insights.

Exports have persistently hovered around just under the 30% mark, from around 28% in 2020 to nearly 30% in 2021, 29% in 2022 and currently 27.5% in 2023.

Exporting countries include Qatar, Oman, the UAE, Egypt and Algeria. Qatar contributes the most to global LNG exports in the MENA region, accounting for around 70%.

Although MENA exports remain strong, market share has slowly thinned as increased production by the US and Australia enters the market.

MENA exports to Europe and Asia fell 23% and 5% respectively from 2022 to 2023.

Middle East exports bolstered

Exports remain high out of the Middle East and efforts are being made to secure near and long-term deals.

"The [Middle East] region's three active exporters have all signed notable contracts in the past quarter, advancing both their marketing efforts across the near and long term and their efforts to support long-term LNG production via new infrastructure and gas production," Joe Matthews, Senior Analyst at S&P Global, said in a quarterly outlook to 2027 report.

Qatar said in October that three of its equity partners will be purchasing volumes from key projects to deliver LNG into Europe. Additionally, Oman LNG has also increased marketing efforts in preparation for the end of its existing sales purchase agreements by the end of 2024. The UAE's ADNOC LNG has also been progressing with marketing this year, with several contracts signed.

However, despite these moves to keep Middle Eastern exports healthy, a raft of maintenances could limit the region's export marker share for 2023. Oman LNG had maintenance which began at the beginning of October, which could limit production in Q4, while Q3 exports from ADNOC LNG suffered from technical work at its plant, although its supply has since recovered.

Exports from Qatar, Oman and the UAE stand at 92.18 million mt as of Dec. 7, according to S&P Global data. Qatar contributed around 82% of the volume, followed by Oman at 12% and the UAE at nearly 6%. The total is down from 93.7 million mt in 2022 over the same period, but up from 91.12 million mt in 2021.

North African divergence

Turning to North Africa, that region's two LNG exporters, Algeria and Egypt, have seen diverging trends, with the former seeing a sharp rise in exports from 2022 to 2023 and the latter experiencing a decline.

Exports out of Algeria, described by the US Energy Information Administration as "one of the world's first LNG exporters...[with] over 40 years of LNG export history," jumped from 9.74 million mt last year to 12.88 million mt so far in 2023, according to S&P Global data.

Sources have suggested that Algeria's domestic consumption is being outmatched by their production, which has helped to provide a push into exports this year. Algeria knocked Nigeria off the top spot as the biggest African exporter in August, accounting for 43% of total exports.

However, despite remaining largely stable over the last 10 years, "Algeria's ability to increase LNG exports in the near term is limited due to insufficient investment to maintain and expand natural gas production from aging fields and growing domestic demand," the EIA said in a report.

State energy group Sonatrach is attempting to address this with its five-year investment plan, which extends out to 2027, through which it aims to invest some $30 billion into both exploration and production of hydrocarbons, particularly natural gas, the company's CEO Toufik Hakkar said in January.

LNG exports from Egypt, which depend on domestic demand and the volume of available natural gas for export, dropped from 5.88 million mt to 3.35 million mt over the same period, S&P Global data showed.

Population growth, which has led to increased domestic consumption in Egypt, and weaker production have dampened LNG exports out the country, sources said. Also, exports were hit in October when Israeli supply of natural gas was halted into Egypt due to the shutdown of the Tamar field in the wake of the Oct. 7 Hamas attacks.

Although geopolitical risks hindered Egyptian exports that month, Egypt is looking to revive the market. As long as availability of gas supply remains healthy, Egypt should be able to gradually increase their export capacity. Also, if prices remain competitive, this should help to incentivize exports, S&P Global analysts said.

Platts, part of S&P Global Commodity Insights, assessed the DES Mediterranean Marker for January at $11.613/MMBtu Dec. 6, up 38.8 cents/MMBtu on the day.