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Out with the old, in with the new: alternative energy sources in the Middle East and North Africa

Dominique-Dee Jones

Source: Middle East Institute

This article was originally published in the YDS 2022 Year in Review Special Edition. Read it and other articles here.

Russia’s invasion of Ukraine has exposed the vulnerability that arises from neglecting energy resource diversification. A scramble has ensued to find alternative energy sources, resulting in a renewed interest in some Middle Eastern and North African (MENA) states. Which MENA states are the most well-positioned to make the most of the changing balance of power in the international energy market?


Qatar is a major gas exporter. Specifically, in 2020 it was the second-largest exporter of natural gas in the world. This is because the emirate holds the third-largest gas reserves in the world after Russia and Iran. It also shares the world’s largest gas reserve with Iran. Earlier this year Qatar opened the Barzan gas plant, which has been responsible for driving the Middle East’s growing energy exports.

Between January and September of this year, Qatar was the third largest liquified natural gas (LNG) exporter to the European Union (EU) behind the United States and Russia. However, Doha has been stern in its acknowledgement that Qatari gas will not be able to replace Russian gas. The reason for this is two-fold.

Firstly, there are no direct pipelines between Qatar and Europe through which to transport LNG. This means that Qatari energy would have to be shipped to Europe in liquefied form, which is an energy-intensive process that considerably offsets the climate benefits of using natural gas. The lack of infrastructure was brought up by Qatar at the Gas Exporting Countries Forum. It was noted that significant investment and long-term contractual certainty were essential to supply Europe with gas.

Secondly, Qatar must uphold its contractual obligations of non-diversion to its Asian consumers. Approximately 80% of Qatar’s LNG is exported to Asia with South Korea, India, China and Japan as its biggest importers. With LNG exports already allocated to these states, Qatar must produce more LNG to meet the demands of both its Asian and new European clients.This muddies Qatar’s capacity to become Europe’s outright energy saviour.

However, an LNG supply deal struck between Qatar and Germany in November has been able to provide a long-term diversification plan. The 15-year contract to buy two million tonnes of LNG is set to launch Qatar into the top position as the world’s largest LNG exporter. Whilst unable to immediately replace Russian gas as deliveries won’t begin until 2026, plans for two direct terminals between Germany and Qatar can address infrastructure concerns.


With the second largest gas reserves in the world, Iran was seen as a major contender to provide Europe with LNG. Iranian Foreign Ministry spokesman Nasser Kanaani maintained in September that Iran had the potential to meet Europe’s gas needs.

Many are rightfully cautious about the credibility of this claim. Despite a 3.1% growth in natural gas production in 2021, making Iran the fourth largest gas producer in the world, an increase in domestic consumption saw Tehran run a gas deficit.

Regular gas shortages have seen domestic disruptions including the closure of public services, like bakeries and water distributions, and cuts to heating in households and businesses. Furthermore, when domestic consumption in January increased, Iran cut off gas exports to Turkey, evincing the instability of Iranian gas management. With 94% of Iranian gas consumed domestically, Tehran’s future appears to be one of an energy importer rather than an exporter to Europe.

This is largely due to the crippling technical effect of international sanctions on Tehran. The lack of foreign investment and technological support has left Iran unable to take advantage of its mass reserves. Existing terminals are outdated, and new pipelines would be required to export to Europe.

Considering its tense political climate, catapulted by Mahsa Amini’s death, Iran is ill-equipped to allocate already dire resources to alleviate Europe’s energy debacle.


Another LNG supplier to mostly Asian markets, Egypt is looking to divert 15% of its domestic gas usage for European export. Such ambition comes at a time of economic turmoil for Egypt. Prime Minister Mostafa Madbouly hopes to take advantage of the high gas prices to bring in an extra $450 million a month in foreign currency to Cairo. Such funds would be pivotal in allowing Egypt to cope with the wheat crisis since over 80% of its wheat supply comes from Ukraine and Russia.

Egyptian gas production has been growing since December 2017 after the discovery of the Zohr gas field, the largest in the Mediterranean. This has boosted Cairo as a significant exporter. In the first seven months of this year alone, Egypt has exported 9.45 million cubic metres of LNG, up 44% from 2021’s figures. In 2021, it provided 15% of European energy imports, most notably to Spain, France and Belgium.

In June, Egypt and Israel signed an agreement that will oversee an increase in gas exports to Europe. The Memorandum of Understanding notes that the trio will work together to ensure the stable and long-term delivery of natural gas to the EU that does not compromise decarbonisation targets. The natural gas will be liquefied in Egypt before being shipped to Europe. Although observers have noted that the agreement has not relieved the EU of its reliance on problematic governments, citing both Egypt and Israel’s questionable human rights records.

Thus far, Egypt has appeared to be a ‘trustworthy supplier’—but Egyptian citizens are paying the price. As part of its gas export plan, Egypt has rationed domestic energy consumption and has reintroduced the use of mazut - a polluting fuel oil that contains sulphites and heavy metals. A reduction in street lighting and public spaces, the complete shutdown of lighting in all state administrative apparatuses after hours, as well as the setting of a minimum temperature of 25 degrees Celsius for cooling systems in shopping centres came into effect in August.

The second strategy of the gas export plan is the replacement of domestic gas with mazut. Mazut was on its way to being phased out due to its harmful health and environmental impacts. However, in October, Mazut consumption in Egypt reached 20.95%, up from 11.46% in June. Climate organisations have condemned the partial return to Mazut in power plants and have labelled it a set back to the important progress that was being pursued in Egypt’s energy sustainability.

Whilst Cairo is making the most of the volatile energy market, positioning itself as one of the major exporting benefactors in the region, the domestic longevity of its energy policy may provide future problems.


As Africa’s largest natural gas exporter, Algeria stands among the most capable of taking advantage of the EU’s energy diversification mission. In 2021, Algeria was Europe’s third largest gas supplier, providing 11% of its gas needs, trailing Russia and Norway. Italy and Spain received 65% of Algeria’s total gas exports. Algeria’s appeal also derives from the fact it has direct undersea gas pipelines to Spain and Italy and an LNG terminal. The country can also export via ship which many believe may be the best method through which to increase LNG exports.

As an exporter with substantial reserves and most of the required infrastructure, high gas prices are likely to protect Alegria from the economic impact of Russia’s invasion of Ukraine. Estimates find that Algeria is expected to earn an additional $15 billion USD from energy exports this year alone.

Outright optimism regarding Algeria’s capacity as a dominant exporter has been cautioned against by those who cite Algeria’s tendency to use gas as a ‘political weapon.’ In the past, Algeria has cancelled gas contracts with Spain over its support for Western Saharan autonomy. Furthermore, in 2021, due to escalating tension with Morocco, the Maghreb-Europe pipeline which connected the two states to Spanish and Portuguese gas grids was closed.

This did not stop the Italian oil and gas company, ENI, from finalising a deal with the Algerian state-owned Sonatrach in July. Overseen by former Italian Prime Minister Mario Draghi, Algeria will export an extra 9 billion cubic metres of gas by 2023 via the Transmed pipeline. The deal makes Algeria Italy’s primary gas supplier.


Much like Egypt and Qatar, Algeria looks promising and is projected to benefit immensely in comparison to its North African neighbours. But the successful expansion of Algerian gas production, particularly considering increasing domestic demand, is something that must be monitored closely.

As Qatar, Iran, Egypt and Algeria vie for prominence in the energy market, it is indisputable that none of these states can provide the quick fix that Europe is looking for. Due to years of dependency on Russia and the subsequent disregard of MENA exporters, infrastructure and funding issues have tainted attempts to replace Russian gas in the short term.


Dominique-Dee Jones is currently studying a Bachelor of Arts in History and International Studies at the University of Melbourne. She has interned for the Australian Institute of International Affairs, and is interested in undertaking further study in the history of Eurasian foreign relations.



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