Representatives of Algeria, the European Union and more than one hundred energy companies met in Algiers on 23-24 May at the very first EU-Algeria Business Forum dedicated to energy with the aim to revamp their energy cooperation after years of faltering exports from North Africa to Europe. Algeria is on Brussels’ list of top potential partners as it aims to diversify its energy supplies away from Russia after the conflict in Crimea once again revealed the weaknesses of too much reliance on Moscow. The Forum was opened by EU Commissioner for Climate Action and Energy, Miguel Arias Cañete, and Algeria’s Energy Minister, Mr. Salah Khebri.
At the moment, Algeria is the EU’s third biggest gas supplier after Russia and Norway, however, its potential is still untapped as the three pipelines across the Mediterranean Sea continue to be widely underused. In 2013, the EU estimated that the North African country exported 25 billion cubic metres (bcm) of natural gas via pipelines to Spain and Italy, which is less than 50 percent of their capacity. In the same year, Algeria exported 15 bcm of liquefied natural gas out of the capacity of 40 bcm. The insufficient usage was caused by a number of factors, including the declining demand from Europe coupled with depleting output from mature fields and Algeria’s own domestic need to generate more power.
Although there has been mutual interest on both sides to boost cooperation in energy policy, the lack of investment needed to discover and develop new fields has hindered many efforts, including dozens of projects that Algeria hoped to generate new output. Investors are distracted by the lack of stability in the country, red tape, difficult contract terms and problems in the state-run oil company Sonatrach. EU Ambassador to Algeria, Marek Skolil, admitted that there was a good awareness of what challenges were but both sides are determined to overcome them and develop a dialogue on gas, renewable energy sources and efficiency.
