IntelBrief: Algeria well placed to help Europe in the Ukraine crisis

AP Photo/Fateh Guidoum

Bottom line up

  • Algeria is a potentially significant contributor to US efforts to ensure that Europe does not experience a major shortage of natural gas supply as a result of the Ukraine crisis.
  • Algeria would not, on its own, be able to fully compensate for a cut in the supply of Russian gas to Europe, even if its supply could meet part of the potential needs.
  • Since nationwide protests forced longtime President Abdelaziz Bouteflika to resign in 2019, Algeria has continued to experience unrest and questions over the legitimacy of leadership.
  • Algeria’s foreign policy is still reeling from the Trump administration’s decision at the end of 2020 to recognize Morocco’s claim to sovereignty over Western Sahara, as well as ongoing instability in Libya.

A key part of the US-led effort to deter Russia from invading Ukraine is to organize additional gas supplies to Europe, anticipating that Russia could retaliate against global sanctions by reducing or by cutting off gas supplies to European Union (EU) countries. Russia is by far Europe’s biggest supplier of gas and stopping these exports would almost certainly lead to severe shortages unless additional supplies are available to move to Europe.

In statements related to the Ukraine crisis, US officials said they were talking with several leaders to ensure “stability in the global energy supply”. Countries in a position to provide significant assistance include those, such as Qatar and Algeria, that could potentially redirect existing gas supplies or add gas volumes to those they already deliver to Europe. Algeria is already the EU’s third-largest gas supplier (behind Russia and Norway), supplying around 8% of EU gas supplies in 2021 via pipelines across the Mediterranean Sea. Algeria also has a liquefied natural gas (LNG) terminal to export gas by ship. State-owned oil and gas company Sonatrach has completed several new gas projects in recent years and has spare production capacity and pipelines that it could tap to increase exports to the continent, if it chooses to do so. Some additional exports to Europe could come through a recent expansion of the Medgaz gas pipeline to Spain, for example, according to Algerian officials. However, Algeria alone could not compensate for a complete halt in Russian deliveries.

Most other major gas exporters are less well placed than Algeria to help alleviate a gas crisis in Europe. Libya, which is already struggling to supply its customers over time in a context of political instability and a presidential election postponed beyond the scheduled date of December 24, 2021, does not have the capacity to export extra gas. Egypt has reached its LNG export volume limit. The United States is already shipping record shipments to Europe. Qatar could redirect some supplies to Europe, but only if its long-term contract customers in Asia were willing to accept temporary reductions in deliveries. Norway could provide the biggest boost for Europe, industry sources say, leaving Algeria as the second-largest source of additional volumes for EU countries in the event of a Russian cut.

Even if it has unused capacity to export gas, Algerian politics and its regional policies could hamper its ability to increase its exports. President Abdelmadjid Tebboune – the successor to Abdelaziz Bouteflika, who served as president from 1999 until a popular uprising in 2019 forced him out – faces opposition and domestic unrest. Bouteflika presided over a period of relative stability after years of upheaval from a near-civil war with Islamist insurgents that then spawned a North African affiliate of al-Qaeda (al-Qaeda in the Islamic Maghreb, aka AQIM). However, the ailing leader’s rule became progressively more repressive, triggering the popular backlash that overthrew him. Tebboune, backed by an obscure group of military leaders and other elites, failed to implement promised reforms and instead replicated the Bouteflika-era crackdown on those who called for government accountability and democratization. The unrest did not directly affect Algeria’s gas export sector or its pursuit of new energy projects, but the government has pledged to maintain high levels of subsidies to avoid further social unrest. It currently subsidizes almost everything from basic foodstuffs to housing, medicine and fuel. The regime may fear that helping to ease a gas shortage in Europe will leave it vulnerable to public accusations that it is diverting resources from domestic economic needs – which include gas consumed domestically – to serve US and European interests. other global interests.

The Algerian government has shown its willingness to sometimes weigh more heavily on regional policy than on its interests as a gas exporter. Algeria has strongly opposed the Trump administration’s decision in December 2020 to recognize Morocco’s claim to sovereignty over Western Sahara – a quid pro quo for Morocco’s agreement to join several Gulf states (United Arab Emirates and Bahrain) in normalizing relations with Israel. Algeria supports the Polisario Front, which claims the independence of the disputed territory. The US decision on Western Sahara, not overturned by the Biden administration, still disrupts US-Algerian relations and contributed to Algeria’s severance of official diplomatic relations with Morocco in August 2021.

In October, Algeria terminated a contract under which it was transporting gas to Spain via a pipeline through Morocco. This line would almost certainly have to be reopened if Algeria were to make a significant contribution to mitigating a cut in Russian gas supplies to Europe. Algiers has also been at odds with Washington over neighboring Libya and Syria. Algeria has opposed the NATO-led military action that helped overthrow the regime of Muammar Gaddafi, although more recently it has backed UN-backed reconciliation efforts around an election postponed from December 24, 2021. Algeria also maintains relations with the Assad regime in Syria. despite Washington’s efforts to prevent a broad reintegration of Assad into the Arab fold. Algerian leaders are likely to try to trade any promise of additional gas supplies to Europe for US and regional concessions on issues of direct strategic interest to Algiers, while remaining alert to any public backlash on a Algerian role in the Ukrainian crisis.