Could the diplomatic crisis between Paris and Algiers go so far as to break certain commercial contracts between the two countries? Everyone obviously thinks about gas. Despite the tensions, the experts interviewed think not, even if they remain cautious.
In recent weeks, the Algerian press has widely relayed the announcement made by Engie, in December, to sell its minority stake in the Touat gas project to the Thai PTT, questioning the political dimension of this decision, even if this is part of the group’s strategy, which is not new, to reduce its exposure to fossil fuels.
France’s fourth gas supplier
« In 2023, Algeria represented 13% of French gas purchases, including 10% via long-term contracts and 3% directly on the spot market. », underlines Thierry Bros, recalling that the country is the fourth supplier in France, behind Norway, the United States and Russia. The gas arrives in the form of liquefied natural gas (LNG) in French LNG terminals, with Engie and TotalEnergies, which has stakes in the fields.
On paper, Algeria could stop selling gas to France and France could also buy it elsewhere, undoubtedly at a premium. “ The gas market is today sufficiently flexible and deep to compensate for delivery stoppages, even large-scale ones, as we saw with Russia. There is plenty of availability at UNITED STATESin Qatar or even in Australia », Estimates Olivier Appert, energy advisor at Ifri.
In the space of two years, American shale gas has already made it possible to partly compensate for the sudden drop in deliveries of Russian gas via pipelines delivering to Europe. And its share could still grow. In November, Ursula von der Leyen, the President of the European Commission, proposed to Donald Trump to increase imports of American gas from the EU, in order to rebalance trade. During his campaign, the new president-elect threatened to tax imports of European products in order to put an end to the European Union’s trade surpluses vis-à-vis the United States.
Difficult to denounce agreements
But, in practice, the suspension of long-term contracts is quite complicated and, above all, can result in heavy financial penalties. In June 2024, the international arbitration court, based in Stockholm, ruled that the German Uniper was entitled to claim damages, estimated at several billion dollars, from the Russian Gazprom which had suspended its deliveries in 2022 , at the time of the war in Ukraine, evoking the “ force majeure ».
-The unilateral denunciation of a trade agreement can also harm, in terms of image, the person who takes this path. “ Neither France nor Algeria has any interest in doing so. Everyone can use other means of retaliation, without touching gas, which has always been considered a strategic area », Explains Francis Perrin, research director at the Institute of International and Strategic Relations (Iris).
Algerian gas goes to Central Europe
Algeria also remains an important supplier to the European Union, supplying around 15% of its needs. Last year, it even broke a sales record with Spain, supplying 39% of gas imports. The two countries are connected by the Medgaz gas pipeline. In 2022, the day after the outbreak of the Russian invasion of Ukraine, Algeria also signed an agreement with Italy to deliver more gas via the Transmed gas pipeline.
« The countries of southern Europe have always been the traditional outlet for Algerian gas, but since the Ukrainian crisis, Algiers is turning more and more towards central Europe », underlines Francis Perrin, recalling that the EU has decided to do without Russian gas completely in 2027 and that it must therefore find new partners between now and then. Last year, Sonatrach, which is the Algerian public operator, signed a first supply agreement with Germany, Croatia and the Czech Republic. The contract with Slovenia was also renewed.
Significant shale gas reserves
The sixth largest gas exporter in the world, Algeria has available capacity to export its gas, via Transmed and its liquefaction units, which are not operating at full capacity. Algeria sells abroad about half of its production, which last year reached 104 billion cubic meters. “ Algerian production has progressed greatly in recent years, but the government’s priority is to first respond to domestic needs which are increasing significantly. », underlines Francis Perrin.
To export more, the country is counting on the exploitation of new deposits, in particular shale gas, which would be present in abundance underground. Last year, Sonatrach initiated discussions with ExxonMobil and Chevron, two American majors, to carry out exploration campaigns.
