Algerian Gas Can’t Be Panacea for Europe’s Energy Needs, Report Warns
13:50 GMT 20.05.2022 (Updated: 14:17 GMT 20.05.2022)
Europe’s major economies began a new “scramble for Africa” in March, traveling to major oil and gas-producing nations in both North and Sub-Saharan Africa in search of oil and gas to replace supplies traditionally provided by Russia.
Algerian natural gas won’t be able to save Europe from its reliance on Russian supplies of the strategic resource, London-based Arabic-language digital newspaper Rai Al Youm has warned
The outlet noted that while Algerian gas has become a source of hoped-for energy security for Spain, Italy, France, and even Germany, domestic factors and Algiers’ desire to remain on good terms with Moscow may prevent the country from becoming the energy panacea the Europeans are looking for.
Algeria, the largest exporter of gas in Africa, was the seventh largest
in the world in 2020, and has at least 4.5 trillion
cubic metres of proven gas reserves. A network of pipelines winds from massive fields in the centre and south of the country, taking the blue fuel to Iberia and the southern tip of the Italian "boot". The nation also has two large liquefied natural gas (LNG) plants in Arzew and Skikda along the Mediterranean coast, allowing LNG to be loaded up and delivered to other European destinations on board tankers.
However, Rai Al Youm points out that much of the country’s energy infrastructure is ageing, and rising domestic consumption is impeding the country from quickly ramping up output.
A number of European energy companies, including Italy’s Eni, France’s Total, Norway’s Equinor, and Germany’s Wintershall already operate in the gas-rich nation, cooperating with Algerian state-owned energy giant Sonatrach on a broad range of projects. Italy alone imported about 21 billion cubic metres (bcm) of gas from Algeria in 2021, and has signed an agreement for an additional 9 bcm between 2023 and 2024 – equivalent to about 12 percent of Rome’s annual gas consumption. Wintershall has agreed a six-field contract expected to produce 2.8 bcm annually until 2041.
Europe’s plans to wean itself off Russian supplies has also prompted France and Spain to discuss reviving MidCat, an abandoned 190 km pipeline project that would pump Algerian natural gas across the Pyrenees to Barbaira in southern France. Proposed in 2003, the project was abandoned in 2019 after squabbling over costs and environmental impact considerations.
There are also geopolitical considerations at play. Last month, Algeria threatened to terminate
gas exports to Spain if Madrid tried to resell it to other countries – pointing to Spain’s move to supply gas to Morocco, with whom Algiers is in a dispute over the region of Western Sahara. The Spanish government immediately backed down, vowing that “in no case will the gas acquired by Morocco come from Algeria”.
Morocco lost its access to natural gas supplies coming through a pipeline from Algeria in October 2021, after a 25-year gas distribution agreement expired. The kingdom annexed Western Sahara in 1976, with Algeria backing the Polisario Front independence movement in the region.
Russia also won’t stand idly by as the Europeans seek to cosy up to Algeria for energy, Rai Al Youm suggested, pointing to Russian Foreign Minister Sergei Lavrov’s visit to the country earlier this month to mark the 60th anniversary of diplomatic relations between the two countries.
During his 10 May visit, Lavrov stressed the strong and friendly relations between Russia and Algeria, pointed to plans to strengthen economic, energy, and military cooperation, and to make good on the 2001 treaty aimed at scaling up strategic bilateral ties.
Algeria is Russia’s second-largest
trade partner in Africa after Egypt, and the two nations have enjoyed close ties going back to Soviet days, when Moscow supported Algiers’ fight for independence from France, and sent aid to help rebuild the country’s economy and demine wide swathes of territory after it achieved independence in 1962.
Lavrov’s trip to Algeria was preceded by that of Antony Blinken, who travelled to the country in March, becoming the first US secretary of state to visit in 22 years. In his public remarks
, Blinken was said to have discussed regional security, economic cooperation, and human rights with his Algerian counterparts, as well as dangled US technology exports before his hosts.
Behind the scenes, Rai Al Youm suggested, the visit may have constituted “American pressure on Algeria to increase gas supplies to Europe and to try to coopt the country into the ranks of the West”.
Ultimately, the outlet stressed that Algeria will not be able to “save” Europe or “rid it of its dependence on Russian gas”.
“Algeria is facing a difficult situation”, veteran German energy expert Cyril Widdershoven told German media last month, emphasising that if it seeks to help Europe with additional relations with Europe, Algiers will threaten its strategic ties with Moscow. On top of that, “it’s not clear to what extent Algeria can be an actual alternative to Russia, at a time when it is suffering from the stagnation of its oil exports due to a lack of investments in the sector, and the rapid growth of domestic demand”, Widdershoven said.
Dr Hussein Kadri, a professor of international relations at the University of Algiers, characterised the diplomatic commotion around the country amid the Ukraine crisis as a situation in which Algeria is “between a rock and a hard place”.
“Algeria can be an alternative, but at the same time it needs investment because its energy capabilities do not allow it to replace Russian gas over the short term”, Kadri said, speaking to Sky News Arabia.
13 October 2021, 23:30 GMT
Algeria is one of several African energy powers the Europeans have engaged in recent months in a bid to find alternatives to Russian oil and gas. In March, European officials flocked to Nigeria
to discuss a potential “strengthened partnership” in the energy sector with the country. Earlier this month, Bloomberg reported on the existence of an EU energy plan
characterising Nigeria, Senegal, and Angola as nations with “largely untapped potential” for liquefied natural gas production.
Late last year, Nigerian Environment Minister Mohammad Mahmood Abubakar accused developed nations of deliberately defunding Africa’s natural gas projects on the grounds that they contribute to the global climate crisis.
The European Investment Bank stopped
financing African fossil fuel projects in late 2021. The same year, the Western-dominated World Bank said
it too would shift resources away from natural gas projects in favour of initiatives that would help in “combating climate change”.
European countries have spent months promising to reduce energy imports from Russia, with the European Commission recently proposing an embargo on Russian oil in a proposed sixth package of sanctions. Hungary blocked the initiative, saying a ban on Russian oil would be equivalent to dropping an "atomic bomb" on the country's economy.
Russian President Vladimir Putin commented
on these measures on Tuesday, saying that if the European Union wanted to commit economic suicide, it was its business.
“Obviously, together with Russian energy resources, economic activity will also be leaving Europe for other regions of the world. Such an economic auto-da-fe, or suicide, is of course the internal affair of European countries. We must proceed pragmatically and proceed primarily from our own economic interests”, Putin said.