EU, Algeria eye further strengthening of cooperation in gas sector: EC

The EU and Algeria agreed Feb. 12 to further strengthen cooperation in the gas sector, with Brussels calling Algeria a "strategic and reliable" partner for the EU's gas supply.

In a statement following the sixth meeting of the high-level political dialogue on energy between the EU and Algeria, the European Commission said Algeria's importance as a gas supplier had been further underlined "in the current global context".

Algeria is a key supplier of pipeline gas to Italy and Spain, and also exports the majority of its LNG to European markets. In total, Algeria supplied 39.2 Bcm of gas to the EU in 2024, according to the latest full-year EC data, making up some 14.4% of EU imports.

"Algeria is a strategic and reliable partner for the EU's natural gas supply. Both sides expressed their common ambition to further strengthen cooperation in the field of gas, and to support the resilience of the European energy system," the EC said.

The summit was attended by Algeria's minister of state for hydrocarbons and mines, Mohamed Arkab, Algerian energy minister Mourad Adjal, and the EU's energy commissioner Dan Jorgensen.

Jorgensen said the meeting in Algiers was "very timely" as the EU moves away from its dependency on Russian gas.

"Algeria has already -- for decades -- been a very important partner for us when it comes to gas. But it will be even more important in the future," Jorgensen said after the summit.

The meeting came with European spot gas prices trading above Eur30/MWh. Platts, part of S&P Global Energy, assessed the Italian PSV month-ahead contract on Feb. 11 at Eur32.76/MWh.

The EC said the parties also discussed Feb. 12 the prospects for the development of the hydrocarbon sector in Algeria, in particular gas, which is considered a "common strategic" issue.

"They stressed that Algeria remains a major and reliable supplier for Europe, and expressed the wish to see an increase in European investment in the hydrocarbons sector in Algeria," it said.

Algeria is currently preparing for a new upstream licensing round following a successful 2024-2025 bid round. Regulator Alnaft said in June last year it had awarded five of the six blocks offered as part of efforts to further boost new upstream activity in the country.

Algeria is also one of six non-EU countries exempted from new "prior authorization" requirements under the REPowerEU program that require importers of non-Russian gas to provide information on the country of production.

Algeria -- along with Nigeria, Norway, Qatar, the UK and the US -- meet the criteria to be exempted from prior authorization for their gas supplies to the EU, the EC said this month.

It comes amid concerns that Russian gas could find its way into Europe classed as gas from a different supplier.

Methane regulation

The EC said the two sides also discussed Feb. 12 Algeria-EU cooperation on reducing methane emissions.

"They agreed to strengthen coordination and consultation to ensure a harmonized implementation of the EU Methane Regulation, so as to preserve and optimize access for Algerian gas to the EU market," the EC said.

It said this would have a positive impact in terms of climate change mitigation, methane availability for the local Algerian market or increased exports.

"The EU welcomed Algeria's commitment to reducing methane emissions as a key factor for the competitiveness and long-term sustainability of its gas exports," it said.

Gas industry groups have expressed concern that the EU's methane regulation hinders the signing of new long-term gas supply contracts.

The regulation aims to reduce energy sector methane emissions in Europe and global supply chains, but also includes a methane transparency requirement on imports.

Importers are required to report annual methane emissions data, and starting in 2027, new import contracts must also meet the same monitoring, reporting, and verification standards as EU producers.

Hydrogen strategies

The EC also said both sides presented the progress made in rolling out their respective renewable and green hydrogen strategies.

The SoutH2 Corridor project, which aims to develop a corridor dedicated to hydrogen transport linking Algeria to Europe, was discussed, as was the EU's contribution to the project "Support for the energy transition and the development of hydrogen".

"The challenges inherent in the deployment of hydrogen and its derivatives were also mentioned, namely, the establishment of a clear and incentive regulatory framework, the development of robust and competitive hydrogen markets that are transparent and accessible through visibility into future demand, the mobilization of investments to develop integrated industrial projects, and capacity building and the creation of sustainable wealth and jobs at local level," the EC said.

Both parties also recognized the growing importance of developing energy infrastructure, in particular electricity interconnections between Algeria and the EU.