Algeria - Spain - EU and gas


Europe is one of the world's most important natural gas consuming markets, and as the war in Ukraine continues, the significant increase in energy supply prices is creating serious concerns. This gas shortage in the European Union presents a unique opportunity for Algeria to expand its presence and consolidate its position as the most reliable gas supplier, taking advantage of its geographical proximity to Europe.
Algeria is the world's eighth largest gas producer and has 3% of the world's proven reserves, but its territory is virtually unexplored and is estimated to have large undiscovered natural gas deposits. On 5 July, it celebrated 60 years of independence at a key moment for its relationship with Europe.

The EU cannot fully replace Russian gas imports in the short term, but is determined to reduce its dependence. A deal with Algeria would signal to Russia that alternatives exist and help ease pressure on prices.
When businessman Pere Duran i Farell discovered Algeria's potential in the 1960s, few Europeans were betting on the country. However, the industrialist opened the doors to privileged relations between Spain and Algeria, multiplying contacts and economic ties, and helping to build the pipelines that today transport 70% of Algerian gas production to the EU.
Spain buys LNG from Algeria, but the pipeline link through Morocco was closed last November after decades of disputes between Algiers and Rabat, mainly over Western Sahara. Moreover, Algiers' relations with Madrid have cooled since March when Spain backed the Sahara autonomy plan presented by Morocco and rejected by Algeria, the Polisario's main ally.
The diplomatic conflict with Spain has intensified and taken on a European dimension, with Madrid receiving strong EU support. This is an opportunity for Algiers to review its relations, and to play a more significant role and become the EU's necessary partner and main gas supplier.

Spain could supply gas to the rest of Europe through the two gas pipelines that link it to Algeria: the Duran-Farrel pipeline in Gibraltar and the MEDGAZ pipeline from Oran to Almeria. Although it would be necessary to complete the MIDCAT pipeline through the Catalan Pyrenees, this would make Spain a hub country. Algeria will also need public policies to control the growth of domestic demand and boost investment to support increased production.
Relations between Spain and Algeria present elements of complementarity, with common interests and no great competition. There are more than 300 Spanish companies present in various sectors and dozens of projects in Algeria; there are also great opportunities pending in numerous sectors.
Algeria and Spain have overcome other tensions in recent years, and can aspire to build a strategic neighbourhood relationship: economic cooperation is the prelude to political rapprochement, protecting trade relations and enhancing mutual interests outweigh thorny issues.
The Maghreb is key for Spain and Europe. The EU is the region's main partner, but it plays a secondary role in the face of uncertainty in the region. Failure to act multiplies the risk. A new European approach based on economic cooperation and regional interaction is needed, because a policy oriented only towards security or energy cannot be the only option.
The needs in Algeria today are colossal. Time is pressing for a population with an uncertain future. The authorities must respond to the enormous yearnings of their people, and Europe and Spain must help pave the way.
The war between Russia and Ukraine has made it clear that Europe has no choice but to take a closer and renewed look at Algeria and its southern neighbours.