On energy supplies to Europe, Algeria is turning up the gas.
The North African country is richly endowed with what some call ‘blue gold’, and it wants to pipe more of it to Europe, which wants to move on from Russia.
Only two weeks ago, a German energy firm inked a deal to import Algerian gas. Algiers is already the biggest supplier to Italy and the second biggest to Spain.
Algeria’s move to harness the economic power of its significant resources has intensified in recent years.
The discovery of new gas fields sent the country into sixth place in the OPEC rankings of reserves, with estimates that they amount to billions of cubic metres.
Only two weeks ago, a German energy firm inked a deal to import Algerian gas. Algiers is already the biggest supplier to Italy.
Reliable option
Having increased production after Vladimir Putin's invasion of Ukraine, Algeria is now the leader in gas supply in Africa and is poised to go further, with ten new oil fields in the past year.
What interests Europe's leaders is the potential for a lot more. More than two-thirds of the Algerian landmass is (as yet) geologically unexplored.
According to Sonatrach, Algeria's state-owned oil company, another 100 or so energy discoveries are yet to be announced. Yet these increases don't cause the eyes to swivel.
Algeria expects natural gas production to rise by 4% by 2026 (so around 2% a year), according to the country's minister of energy and mines, as quoted in the monthly bulletin of the Organisation of Arab Petroleum Exporting Countries (OAPEC).
Energy expert Belmekki Mohamed Elmekki says Algeria has a reputation as a "reliable and secure gas supplier, fulfilling contractual commitments with Mediterranean partners", including France's TotalEnergies and Italy's Eni.
He also told Al Majalla that the war in Ukraine has "prompted European nations to seek alternative gas suppliers", listing Algeria alongside Azerbaijan and Nigeria.
In Amenas gas Plant Tiguentourine, the largest gas development processing plant in Algeria.
Attacks on the pipeline from Russia to Germany in September 2022 by parties unknown forced the continent to look elsewhere.
Algeria is an option. Elmekki highlighted how just one pipeline from Algeria brought 55 billion sqm to Europe last year.
"Algeria's robust infrastructure distinguishes it from many other gas-producing nations, notably Nigeria," he said.
Although Iran has massive reserves, it is under a bevvy of sanctions, as has Russia since 2022.
Moscow, knowing that gas sells, turned east to increase exports to China. Projects such as the 'Power of Siberia' pipeline will turbocharge the exchange.
If Europe keeps opening its valves to Algeria, the latter's gas industry could be turbocharged, too.
Europe's leaders know there may be a lot more. More than two thirds of the Algerian landmass is (as yet) geologically unexplored.
Wells and riches
Its heart is located at the gargantuan Hassi R'Mel field, one of Africa's largest, renowned for its rich condensates.
Others include Hassi Messaoud in the southeast and Hassi Berkine and Ourhoud, which were discovered in the 1990s through a partnership between Sonatrach and the US oil company Anadarko.
The south-western basins, notably in Salah, Adrar, and Timimoun's Ahnet, are also significant contributors to gas production, with fields like Hassi Tidjerane and Tinrhert producing approximately 4.5 billion cubic metres annually.
Exports in 2022 surged 36% year-on-year to $4bn, with exports reaching 147 countries, a historic milestone. In 2023, a significant increase in its gas exports led to Algeria becoming Africa's largest LNG exporter, passing Nigeria.
According to OAPEC's latest figures, the growth in Algeria's exports is reported to be the highest in the Arab world. Analysts say all the ingredients are there for more.
Bouchikhi Bouhaous, a lecturer at the University of Mostaganem, said Algeria's resources and close proximity to European destination markets are key.
"Algeria's gas reserves qualify it for a significant global role in gas delivery worldwide, whether through pipeline transportation or shipping after liquefaction," he said.
Sonatrach AVAL head office building in Oran Algeria.
"The reserves are currently approaching 5000bn m3, with annual production exceeding 100 billion. Additionally, Algeria has mastered natural gas conversion technology and extensive gas transportation capabilities through four pipelines—two in the east and two in the west," he added.
Bouhaous said Algeria annually exports around 11 billion m3 to Italy and approximately 10 billion m3 to Spain through pipelines.
It also exports LNG to France, Spain, the UK, Portugal, China, and India, to name but a few.
The growth has helped the country unveil the largest budget in its history, amounting to $113bn in public expenditure, with an expected deficit of $45bn.
The budget stands out for its increased investment, reduced taxes for startups, salary hikes, and continued support for citizens. Algeria feels flush.
Exports in 2022 surged 36% year-on-year to $4bn, with exports reaching 147 countries, a historic milestone.
Taking the opportunity
Algeria wants to break into new international markets as part of its expansion strategy. Its upcoming Gas Exporting Countries Forum summit will be a crucial platform to outline this strategy.
The moment is now, given that demand is rising.
Bouhaous believes the summit will "confer new regional and international significance on the country, enhancing its global standing".
The 19-nation summit will bring together 12 member countries and seven observers, representing almost 70% of the world's natural gas reserves.
They will be "seeking to coordinate production and marketing", says Bouhaous.
"This applies to both piped natural gas and long-term contracts, plus preferential pricing. Additionally, the summit aims to promote the use of gas to reduce carbon emissions."
Fire from a gas torch in a large oil industry refinery factory in the north of Algeria, an Oil refinery in Skikda.
Mohamed Khodja, research director at Sonatrach's Algerian Petroleum Institute, says the summit is "an opportunity to prioritise and establish agreements in the face of recent geopolitical shifts." So, to leapfrog Russia and Iran.
Khodja points to the "possibility of a significant shortage in gas quantities exported from the Middle East and Gulf countries," saying this "underscores the importance of collaboration in advanced technologies to enhance exploration capabilities".
In other words, Europeans who choose to help Algeria prospect for gas may be wise since Gulf taps could turn off at any minute.
To make the point, Khodja mentions the "awkward" situation in the Red Sea region (where Houthis are diverting ships).
Among those affected by the Houthis' missiles is Qatar, one of the world's largest Liquified Natural Gas (LNG) exporters, whose gas accounts for 20% of global exports.
In these circumstances, Algeria seems set to step up to become a major competitor.
