Last Friday, in Berlin, Algerian president Abdelmadjid Tebboune signed an expanded gas agreement with Germany — the second Algerian-German gas deal in three years, and the first since Sonatrach’s inaugural LNG cargo docked at the Wilhelmshaven terminal on 2 July. German officials called it proof that North Africa is stepping into the space Russia used to occupy. What they didn’t say: the deal’s volumes, its duration, and its price remain undisclosed, and the increased deliveries it promises don’t begin until 1 January 2027 — the same date the EU’s ban on long-term Russian LNG contracts takes effect. Two clocks are now running side by side, and nobody in Berlin has confirmed they tick at the same speed.
Two Clocks, One Deadline
Brussels has spent 2025 and 2026 finalising the mechanics of its Russian gas divorce: short-term Russian LNG contracts end this April, long-term ones by 1 January 2027, short-term pipeline contracts by June 2026, and long-term pipeline gas is banned outright by 30 September 2027 — a deadline set in law, not a target. Into the gap this leaves, EU officials have repeatedly pointed to North Africa — Algeria, Libya, Egypt — as a natural, geographically close replacement. All three host state-owned national oil companies (Sonatrach, Libya’s NOC, and Egypt’s EGAS/EGPC) sitting on some of the world’s largest proven gas reserves, connected to Southern Europe by existing subsea pipelines that Russian supply never had. The pitch, repeated in Brussels briefings and echoed uncritically in most trade press, is simple: swap one hostile supplier for three friendly, nearby ones. The reality, on closer inspection, is not three interchangeable suppliers. It is one that has already left the field, and two whose capacity is far more conditional than the collective label “North African supply” implies.
The Supplier That Already Left
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Start with the one nobody is talking about. Egypt was supposed to be the East Mediterranean’s LNG hub after the 2015 discovery of the offshore Zohr field — instead, operational underperformance at Zohr has pushed domestic output below domestic demand. Cairo has responded by signing a $35 billion supply deal with Israel’s Leviathan field and chartering a fourth floating import terminal for 2026. Egypt isn’t a candidate to replace Russian gas in Europe; it is now a competitor for the same LNG cargoes Europe needs, bidding against European buyers on the spot market. Any framing of “North African supply” that still counts Egypt as a pillar is describing a country that no longer exists as an exporter.
A Two-Country Load, Priced as Three
That leaves Algeria and Libya carrying a two-country load that officials in Brussels are pricing as a three-country one. Algeria’s headline numbers look reassuring: the Transmed pipeline to Italy runs at 21 billion cubic metres against 33.5bcm of capacity, which reads as ample headroom. But that headroom exists because Italian demand has been weak, not because Algeria has spare gas sitting idle — Medgaz, the newer pipeline to Spain, is already running at 9.4bcm against a 10.5bcm ceiling, essentially full. Algerian domestic gas consumption is growing at roughly 4% a year and reached 53bcm in 2023, eating into the volumes that would otherwise go to export. Sonatrach’s own $50 billion investment programme, and the licensing rounds meant to unlock new non-conventional gas with Chevron and ExxonMobil, is explicitly targeted at adding “up to 20bcm a year” — but not for another five to ten years. The Berlin deal signed last week draws on existing capacity, not new molecules; it is a reallocation of a fixed pie, not evidence the pie is growing before 2027.
Libya’s Upside, and Its Fault Line
Libya is the more genuine growth story, and also the more fragile one. Output has hit 1.43 million barrels a day, a twelve-year high, and Eni’s $10 billion in Libyan projects — including a new compression module at Sabratha adding 800 million cubic metres a year via the Greenstream pipeline to Italy — is real, under construction, and already flowing. April’s approval of Libya’s first unified budget since 2013, backed by a ten-nation guarantee from the US, Italy, and Gulf states among others, is the first sign in over a decade that Tripoli and the eastern authorities can agree on how oil revenue gets split. But the same fragility that produced a decade without a budget hasn’t disappeared — it’s been papered over. Libya’s 2025 licensing round, the first in seventeen years, drew 44 applicants and awarded just five of twenty-two blocks, because investors are still signing contracts with the Tripoli government while negotiating security separately with the east. That is not a resolved political risk; it is a live one, sitting directly underneath every barrel and every cubic metre this piece is counting.
Why the Timelines Don’t Match
The objection worth taking seriously: doesn’t record Libyan output and a fresh German-Algerian deal prove the diversification is already working? In volume terms, yes, incrementally. But the EU’s Russian-gas exit is a legal deadline, not a demand forecast, and it lands in 2027 — before Sonatrach’s new licences produce a cubic metre, and while Libya’s governance truce is still less than a year old. The molecules that fill Europe’s gap in late 2026 and 2027 will overwhelmingly be American and Qatari LNG, bought at spot or short-term prices, because that is the only supply that can move on the EU’s timeline. North Africa’s real contribution — the one investors and Sonatrach’s own numbers actually support — shows up more clearly after 2028, once Algerian licensing rounds mature and Libya’s budget framework either hardens into something durable or breaks.
Three Ways This Goes by 2030
Base case (roughly 55%). Algeria and Libya each deliver modest, real increases — the Berlin deal’s volumes and Sabratha’s 800mcm — covering perhaps a third of the Russian pipeline and LNG gap opening through 2027. Egypt stays a net importer throughout. The remainder is filled by higher-priced American and Qatari LNG on shorter contracts, and Europe pays a diversification premium rather than getting a diversification discount. This depends on Libya’s guarantor framework holding and Algeria not diverting more gas domestically than currently projected.
Downside case. A specific, plausible trigger — a dispute over how NOC revenue is disbursed between Tripoli and the east, the same kind of dispute that let eastern forces blockade export terminals in 2020 — breaks the ten-nation budget guarantee sometime in 2027. Greenstream flows to Italy drop sharply at the exact moment the EU’s pipeline ban on Russian gas takes full effect in September–October 2027, and Sonatrach simultaneously prioritises Algerian winter heating demand over export contracts, as it has done in previous cold snaps. The result is a genuine supply shock landing during the coldest, highest-leverage months for European buyers, with no spare North African capacity left to absorb it.
Upside case. Construction on the Trans-Sahara pipeline, linking Nigerian and Algerian gas fields toward a target capacity near 30bcm, accelerates faster than the five-to-ten-year estimates now attached to it, while Chevron and ExxonMobil’s non-conventional gas partnerships in Algeria come online ahead of schedule. Libya, meanwhile, revises its licensing terms to fit the smaller independents better suited to its mature discoveries rather than favouring only major-reserve holders, unlocking a faster and better-subscribed second bidding round. In this path, North Africa’s exportable surplus grows ahead of European demand rather than behind it, handing Brussels genuine pricing leverage against Gulf LNG suppliers for the first time this decade.
What to Watch
Europe is not choosing between Russian gas and a diversified North African portfolio — it is choosing between Russian gas and a bet on two governments, one of which hasn’t held a functioning national budget in over a decade. That bet may well pay off; Libya’s April budget and Algeria’s Berlin deal are genuine, positive signals, not mirages. But the timeline Brussels has legislated and the timeline North Africa’s own capacity is actually running on do not match, and the gap between them will be paid for in LNG spot prices, not pipeline contracts. Watch what happens when the “undisclosed” volumes in the Berlin agreement are finally published around 1 January 2027 — if they turn out to be modest, that is the confirmation this diversification story is running behind, not ahead of, schedule.
