Crisis between Algeria and Spain divides Europe over gas supply

by Lorraine Williamson
Algeria gas

MADRID – While the European Commission (EC) reprimands Algeria for severing friendships with Spain, EU member states report to the North African country to increase their purchase of gas. 

After Prime Minister Sánchez of Spain expressed his support for Moroccan autonomy plans for Western Sahara, Algeria reacted furiously. The North African country almost immediately broke friendships with the EU country and imposed a trade freeze. According to the Algerian government, the political quarrel will not affect the gas supply to Spain. Yet Madrid is not reassured. 

Discord after broken friendships 

The EC, led by Ursula von der Leyen, stands firmly behind Spain. It also questions Algiers in an outgoing statement about the suspension of friendship ties with Spain. Furthermore, the committee also states that Algeria is violating the association agreement with the EU. Despite this situation, the rapprochement that individual member states are seeking with Algeria shows a considerable contrast with the European attitude. 

Algeria: The excellent alternative to Russian gas 

The reason for this rapprochement lies in the fact that Algeria has considerable energy potential. It is the largest natural gas producer in Africa and the largest exporter of gas to Europe after Russia and Norway. 

With two undersea gas pipelines to Europe, there is a well-developed infrastructure. In addition, the Maghreb country offers great potential for sustainable energy such as green hydrogen and solar and wind energy. This makes Algeria an excellent candidate for strengthening trade relations. 

The combination of the search for an alternative to Russian gas and the ‘vacuum’ left behind by Madrid due to the diplomatic quarrel with Algiers, makes the North African country an interesting trading partner. 

Italy, the Mediterranean competitor 

The TransMed pipeline transported 21 billion cubic metres of gas under the Mediterranean Sea to Italy last year. This makes Italy the largest importer of Algerian gas. Nevertheless, Italy wants to increase imports to become less dependent on Russian gas. That still accounts for 40% of the total gas supply. The Draghi government already decided in April to travel to the North African country to close a critical gas deal. Both countries have agreed to increase gas sales to Italy by 40% between 2023 and 2024. 

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France’s thoughtful attitude 

France is reticent about the diplomatic quarrel between Algiers and Madrid. Since Algeria was a French colony until 1962, the French government is aware of the sensitivities and also wants to maintain relatively good relations with the Mediterranean partners. 

In addition, Paris is a modest buyer of Algerian gas, which makes it easier for it to afford this ‘neutral’ attitude. ‘Maghreb specialist’ Khadija Mohsen-Finan is critical and indicates that the position of Paris is not at all neutral: ‘Paris considers Western Sahara – like Spain – as Moroccan territory’. She also mentions that French companies will not hesitate to take advantage of this crisis. “Every time a Spanish company leaves Algeria, a French company jumps into the hole left behind.” 

Germany sees ‘green’ opportunities but is realistic 

Due to its highly developed industrial sector, Germany is a major consumer of Russian gas. The federal government is aware of this dependence and has therefore significantly increased targets for more green energy. The Scholz government is committed to the transition towards more green hydrogen and by 2035 only wants to obtain electricity from sustainable sources. To realize these ambitious plans, the EU country needs access to sustainable energy sources. 

With its potential, Algeria can play an important role in this. Federal Foreign Minister Annalena Baerbock said: “I will offer the Algerian government closer cooperation to expand our trade relations.” 

Despite this, Berlin also realises that the energy transition is not a short-term project. Robert Habeck, economy minister, therefore announced at the beginning of May that Germany will start importing gas from Algeria within two years. At the moment, Germany does not yet purchase Algerian gas. 

Shortly afterwards, the German oil and natural gas company Wintershall Dea announced its intention to become a partner in the Reggane Nord project, which includes the development of six gas fields in the Algerian Sahara. 

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