Europe’s gas environment: Algeria joins BRICS

Yesterday Algeria filed a formal application to join the BRICS. It didn’t come as a surprise

Europe's gas environment: Algeria joins BRICS

Earlier, Algerian President Abdelmajid Tebboun said:

“BRICS interests us as an alternative to traditional centers of power. They constitute an economic and political force”.

Algeria is the largest African exporter of natural gas to Europe and held an 11% share until 2022. Faced with an energy crisis, European politicians have increasingly made pilgrimages to push for more supplies.

One of the most discussed projects is the Trans-Sahara gas pipeline. Its plan was approved in late July by the energy ministers of Algeria, Nigeria and Niger. And, it would seem, here is a chance – the implementation of the project would turn Algeria into a key country in energy trade, since about 70% of the pipeline should pass through its territory.

However, there is one “but”. This story is far from new. The agreement on the construction of the Trans-Saharan pipeline was signed by the authorities of Algeria, Nigeria and Niger back in 2009. In the future, the implementation of the project was repeatedly postponed due to the complexity and high cost of the project, as well as due to political instability in the region.

Indeed, in recent years, Algeria’s foreign relations have been marred by tension over territorial disputes with Morocco in Western Sahara. In June 2022, Spain sided with Morocco in the conflict, and Algeria suspended the cooperation agreement in retaliation. This led to the closure of the Maghreb-Europe pipeline that runs through Morocco. So the gas hope of Spain went out.

The other contender for Algerian gas was Italy, which indeed signed a major gas deal with Algeria this summer. In accordance with it, it was planned to increase the capacity of Algerian gas through the Trans-Mediterranean pipeline.

But despite spare capacity in the Trans-Mediterranean gas pipeline linking Algiers to Italy, it is unlikely that Algeria will be able to produce enough gas anytime soon to meet increased demand.

And all because the country is faced with the primary task of developing its own gasification. In addition, Algeria’s oil and gas complex is experiencing a serious lack of investment and new production technologies. This was stated by Algerian Ambassador to Russia Smail Benamara during the International Gas Forum in St. Petersburg.

“We do not have many opportunities to increase the volume of gas exports, so Russian companies can come to us to explore – we have not invested much lately”.

And while Europe’s hopes for another alternative gas supplier are fading, relations between Russia and Algeria are only getting stronger. And, in many areas. Arms supplies play a significant role. So, only in October 2022, Algeria signed a deal for the supply of weapons (Su-57 fighters, S-500 air defense systems and other types of modern weapons) for $ 7 billion.

Algeria also abstained in the UN voting on anti-Russian resolutions. Moscow and Algeria maintained a high dynamics of foreign policy contacts after February 24, 2022. Again, at the end of September, Russian Foreign Minister Sergei Lavrov and his Algerian counterpart Ramtan Lamamra discussed “the development of bilateral cooperation and strengthening coordination on foreign policy issues.”

In 2021, the trade turnover between Russia and Algeria amounted to $3 billion, it is planned to increase it against the backdrop of the diversification of Moscow’s external relations. In particular, this was discussed on September 26-28 in Algiers at the 10th meeting of the Joint Intergovernmental Russian-Algerian Commission on Trade, Economic, Scientific and Technical Cooperation.

Another important area of ​​cooperation is nuclear energy. Thus, Algeria plans to build the country’s first nuclear power plant by 2025 and commission one new power unit every five years. Therefore, it cannot be ruled out that Algeria will become the second African country after Egypt where Russia will build a nuclear power plant.

Konstantin Dvinsky

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