Russia is the largest exporter of gas to Europe. It provides about 44% of EU imports. At a time of intense confrontation between Russia and Ukraine, the EU has imposed heavy economic sanctions on Russia. The latter could stop exporting its gas to European countries. To help the EU overcome this possible challenge, Algeria is positioning itself as a gas supplier in case of difficulties.
Can the EU get through the next winter without Russian gas supplies? Many specialists question the European Union’s dependence on gas. Ahead of Norway (20%), Algeria (12%), the UK (6%), the US (5%) and Qatar (5%), Russia is the largest exporter of natural gas with 44% of exports. Thus, given the conflicting conditions that could affect exports to the EU, Algeria is offering to step in with more exports in case of a deficit.
The EU, a large market for Algeria?
On Sunday 27 February, the head of Sonatrach, a giant Algerian state-owned hydrocarbon company, said that in the event of a drop in Russian gas exports due to the war in Ukraine, Algeria is ready to supply more gas to the European Union. In this vein, the Italian Minister of Foreign Affairs, Luigi Di Maio, visited Algeria to discuss with his counterpart an increase in Algerian gas supplies. Thus, the authority of Sonatrach, Toufik Hakkar told the daily ”Liberté” that this Algerian company is “a reliable supplier of gas for the European market and is willing to support its long-term partners in case of difficult situations” Europe is therefore a “natural market of choice” for Algeria, which currently contributes 11% of its gas imports, he stressed.
The structure plans to transport product via the Transmed gas pipeline linking Algeria to Italy. Transmed can transport up to 32 billion cubic metres per year, four times more than the Medgaz pipeline that supplies Spain. But given Russia’s position in gas production and export, one wonders whether Algeria alone can supply enough gas to the European Union to replace Russia. “The United States and the EU are working together to secure natural gas supplies to the EU from a variety of sources around the world to avoid supply shocks, including in the event of a new Russian invasion of Ukraine,” US President Joe Biden and European Commission President Ursula von der Leyen said in late January.
A boon for Algeria
Gas is changing in the European market. On Friday 25 February, the Dutch TTF (Title Transfer Facility) was around EUR 113, after peaking at EUR 143 the previous day. This is quite a remarkable figure, reminiscent of the historical record of 180 euros set at the end of December. As the fourth largest economy on the African continent and the third largest exporter of gas to the EU, Algeria can seize this opportunity to move up in the continental and even global rankings. So a few billion more cubic metres could change the face of the Algerian economy.
