EU seeks to strengthen its gas trade with Algeria

EU Energy Commissioner Kadri Simson visits Algiers to co-chair the fourth annual high-level meeting of the EU-Algeria Energy Dialogue, while the French Prime Minister meets her Algerian counterpart in the country

REUTERS/ALBERT GEA  -   Enagas liquefied natural gas (LNG) terminal in the Zona Franca of Barcelona

As the war in Eastern Europe continues to escalate, and fuel and commodity price inflation continues to rise, the EU-27 are pressing ahead with their efforts to disconnect energy from Vladimir Putin's Russia.

This was reflected in the EU's REPowerEU plan adopted by the European Commission earlier this summer - calling for "working with international partners" on "long-term, mutually beneficial partnerships that boost renewable energy and increase energy efficiency". This has been evidenced by the revival of the EU's Energy Dialogue with Algeria, which is expected to become the continent's gas partner to counterbalance dependence on Moscow. 

REUTERS/YVES HERMAN - European Energy Commissioner Kadri Simson speaks during a news conference after a meeting of European Union energy ministers on high energy prices in Brussels, Belgium, September 30, 2022

With this in mind, the European Commissioner for Energy, Kadri Simson, travelled to the Algerian capital of Algiers on Monday - where she will remain until Tuesday - to strengthen the energy relationship and review the strategic partnership agreement that has united them since 2013. "This visit is part of the European Commission's ongoing efforts to diversify the EU's energy supply beyond Russian fossil fuels and to strengthen energy relations with reliable partners," the EU executive said in a press release. 

These efforts coincide with the fourth annual high-level meeting of the Algeria-EU Energy Dialogue, co-chaired by the European Commissioner and the Algerian Minister of Energy, Mohamed Arkab, which is expected to address issues such as the development of investments to explore and extract hydrocarbons, new prospects for partnership in the gas and hydrogen industries, and cooperation in the field of renewable energies and energy efficiency. In addition, the two sides also intend to review "the progress achieved in the field of energy cooperation since the launch of the strategic partnership at the last meeting held in November 2018." 

AFP/ VLADIMIR SIMICEK - Algeria's Energy Minister Mohamed Arkab arrives at the 45th Joint Ministerial Follow-up Commission and the 33rd OPEC and non-OPEC Ministerial Meeting in Vienna, Austria, on October 5, 2022

"This is a ministerial meeting that will set the guidelines for the development and deepening of the strategic partnership in the energy sector, which was sealed in 2013 following the signing of a memorandum of understanding (MoU)," the European commissioner maintained. 

Moreover, the fourth meeting of the Algeria-EU Energy Dialogue - which followed the visit of Charles Michel, the President of the European Council, last September - takes place just one day before the inauguration of the second Business Forum on energy between the EU-27 and Algeria. A meeting that will bring together businessmen and traders from both Mediterranean coasts - mainly Algerian operators and European companies - and which will be held for the first time since 2016, on 11 and 12 October. "The Forum will be an opportunity for European companies to learn about Algeria's energy policies and meet with potential local partners," said European sources quoted by La Sentille. 

AP/FATEH GUIDOUM - French Prime Minister Elisabeth Borne, centre left, and Algerian Prime Minister Aimene Benabderrahmane, centre, attend the Algerian-French Economic Forum in Algiers, Algeria, Monday, Oct. 10, 2022

Faced with the current energy crisis, the EU-27 now aspire to create a joint platform for the purchase of natural gas. An alliance that avoids economic competition and the consequent increase in the price of hydrocarbons, which is why negotiations to lower Algerian energy prices will be key to the outcome of the meeting. 

All this is happening while the North African country, the tenth largest gas producer in the world and a major exporter to Europe, is concluding new contracts with its main energy buyers: Italy, first, and Spain, second. Meanwhile, the French Prime Minister, Elisabeth Borne, is meeting with her Algerian counterpart, Aimene Benabderrahame, to officially open a Franco-Algerian business forum that hopes to open a new stage in relations between Algiers and Paris in order to put several months of diplomatic tensions behind them.

AFP/ALAIN JOCARD - Algerian President Abdelmajid Tebboune (C-R) welcomes French Prime Minister Elisabeth Borne at the presidential palace in Algiers, 10 October 2022

In this context, and although energy issues were not on the leaders' agenda, the French head of government took advantage of her speech to underline the objective of "continuing to make progress" in increasing gas production capacity. 

In the case of trade agreements with Spain, and despite the fact that the two energy decisions adopted by Algiers - in 2021 and 2022 - suggest that the country could use gas as a geopolitical weapon (the closure of the Maghreb-Europe gas pipeline in 2021, and the reduction of gas supplies in 2022, when Sánchez's government announced its support for Morocco's autonomy plan for the Sahara), the company Sonathach and Naturgy signed last week, after months of negotiations, a renewal of the agreements and an upward revision of prices.