In the context of war Russian-Ukrainian started in February 2022, European countries felt an urgency to diversify their sources of natural gas supply, traditionally dominated by Russian imports. Faced with increasing tensions and the imposition of international sanctions on Russia, an energy crisis has emerged within the European Union. The latter, seeking to reduce its dependence on Russian gas, had to explore new avenues to secure its energy needs, thus increasing the relevance of other major gas producers, notably theAlgeria.
Algeria experienced a record year in 2023, with gas production reaching 105 billion of cubic meters, according to a recent report from the World Bank. Nearly half of this production was exported, mainly to Europe, via pipelines and in the form of liquefied natural gas (LNG). This significant increase in production was partly driven by increased demand from European countries, as Italy and the Francein the post-Ukrainian conflict context.
The World Bank report highlights a strategic change in Algerian exports: a greater proportion of gas is now exported as LNG, offsetting a reduction in pipeline shipments. Key infrastructure includes the Medgaz pipeline to Spain and the Galsi pipeline to Italy. LNG, whose prices are more flexible than those of gas transported by pipeline, allows Algeria to navigate the fluctuating energy market more nimbly.
Algerian LNG was mainly sold to TürkiyeFrance andSpain, the three main importers in Europe. During the first quarter of 2024, Algerian LNG production increased slightly, consolidating its place as a key supplier to Europe, despite the closure of the GME gas pipeline that once linked Algeria to Spain via the Moroccofollowing the diplomatic break with Rabat.
Algeria’s capacity to meet European demand is not limited only to increasing gas production. The country has also strengthened its export infrastructure, with the Skikda and Arzew LNG complexes and gas pipelines linking Algeria to European markets. This significant expansion has allowed Algeria to play a crucial role in Europe’s energy security.
In perspective, Algeria aims to increase its production to 200 billion cubic meters in the next five years, which would accentuate its role as a pillar in European energy supply. Currently, it is positioned as Europe’s third largest gas supplier, just behind Russia and Norway. This rise testifies to the growing importance of Algeria on the global, and particularly European, energy scene, in a rapidly changing geopolitical and economic context.
