Algeria boosts gas exports to Europe amid global energy market shift

Algeria is asserting its role as a key energy player in Europe’s quest for energy security, with strategic moves to enhance its oil and gas production capacities and boost exports.

 The North African nation, already a significant supplier, hosted the Gas Exporting Countries Forum (GECF) summit in March, reinforcing its position as a critical global gas supplier.

In 2022, Italy’s Premier Mario Draghi secured a deal with Algeria for increased natural gas imports through the Mediterranean pipeline, aiming to reduce reliance on Russian energy. The agreement, between Italian energy firm Eni and Algeria’s state-owned Sonatrach, promises to deliver up to 9 billion cubic meters of Algerian gas to Italy over the next two years.

The deal, struck between Italian energy firm Eni and Algeria’s state-owned Sonatrach, was a response to the urgent need for diversifying energy sources, particularly in light of Russia’s invasion of Ukraine. European gas imports from Russia have dwindled from 155 billion cubic meters in 2021 to just 28 billion.

Algeria, leading the GECF, is working to fill the gap left by Russia. With three pipelines to Italy and Spain and plans for an additional pipeline from Nigeria, Algeria is enhancing its capacity to supply Europe.

Algeria has already emerged as Europe’s second-largest pipeline gas supplier, after Norway, highlighted by a recent deal to supply gas to Germany’s VNG. The country remains the top gas supplier to Spain and Italy.

Expanding capacity to play in the global energy market
Despite challenges such as insufficient investment, Algeria has embarked on a $42 billion plan to revitalize its role in the global energy market. Sonatrach is leading this shift, with several new gas fields coming online and further expansions expected soon.
Algeria is also curtailing domestic oil and gas consumption, especially in thermal power generation, to maximize export potential. This aligns with the government’s plans to increase renewable energy investments, despite clean energy sources remaining largely untapped so far.

The theme of the GECF summit, ‘Natural Gas for a Secure and Sustainable Future,’ reflects Algeria’s commitment to natural gas as a key energy source for development. The inauguration of the Gas Research Institute’s headquarters in Algiers highlights the country’s focus on advancing natural gas technology and expertise..

Looking ahead
As Algeria navigates global market headwinds, its strategic initiatives and partnerships are reshaping its energy sector stature. Its recent efforts to bolster gas production and explore renewable alternatives also mark a critical juncture in the nation’s energy narrative. With a resolute vision, Algeria is poised to cement its status as a key energy player in Africa and beyond.