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Élisabeth Borne, the French Prime Minister, continues her visit to Algeria with around fifteen ministers at her side. A bilateral economic cooperation agreement has been signed. And if, officially, the gas file is not on the program, the head of government said ” continue to advance with Algeria. On the other hand, it is to diversify the EU’s energy supplies that the European Commissioner for Energy is going to Algiers on Monday 10 October. After a ministerial meeting, Kadri Simson will take part tomorrow in the EU-Algeria Business Forum on Energy. In recent months, Algerian gas has been highly courted, but an increase in flows in the short term seems unlikely.
Algeria has already increased its deliveries and its order book to Italy. Its gas supply to the “boot” had exceeded in July by 113%, which had originally been expected. This summer, a visit by Mario Draghi, Chairman of the Board now about to leave, ended with a new extension.
Since the start of the war in Ukraine, Algiers has also concluded with Rome an increase in exports of 9 billion m3 per year gradually over the period 2023-2024. What there was to take was probably taken, according to several specialists. On the other hand, the share of Algerian gas in deliveries to Spain has fallen sharply. Be that as it may, the room for maneuver is limited.
Algerian production tends to increase
Only slightly, but according to S&P Global, it should increase from 100 billion m3 last year to 103 billion m3 This year. According to the firm’s projections, production should rise a little further to reach 106 billion m3 next year. But production does not mean export. Algeria consumes a significant part of its gas, among other things to generate electricity. Moreover, Algeria being both a gas and oil producer, part of the gas is reinjected into the fields to facilitate oil extraction.
For his part, ” Norway has agreed to increase its gas production by 10%, it is part of the gas that they inject less into the oil fields and which therefore becomes available “, explains Thierry Bros, energy expert and professor at Sciences Po. A rather favorable solution given the current price of gas. But, notes Thierry Bros, this still represents a political effort, an effort made because the European Union is a close partner.
Technically, ” Algeria could do the same “, further details this gas specialist. But Algeria, which has also recently renewed a strategic partnership with Moscow, ” didn’t do it “. The European Union has not drawn its best assets either: the 27 are discussing a possible cap on the price of gas.
New operations in the long term ?
For this, funding is needed. However, the conditions for foreign investors are not the most favorable, although a 2019 law makes the conditions more accommodating than before. Moreover, this summer, a contract of ” production sharing was signed by Sonatrach, Italian ENI, TotalEnergies and Oxy, an oil and gas agreement worth an estimated $4 billion.
A role to play in transit for Algeria ?
Nothing is certain. At the end of July, the Algerian, Nigerian and Nigerien energy ministers signed a memorandum of understanding for a trans-Saharan gas pipeline megaproject. Objective: to transport Nigerian gas to Europe. But this trans-Saharan pipeline has been in the cards for more than twenty years, no date has yet been given and it faces a competing project which would pass off Morocco.
We can also wonder if the pipeline model is still to be preferred. Some experts doubt it. ” Yes the wars [en Ukraine] showed one thing, believes Thierry Bros, is that the pipeline business model is finished. These facilities are more vulnerable to geopolitical hazards than liquefied natural gas. Another example is the closure last year of the Maghreb-Europe gas pipeline, bringing Algerian gas to Spain via Morocco.