Algeria is one of the key gas suppliers to Europe, and in recent years, its role in the European energy market has become increasingly important. As Europe seeks to diversify its energy sources, Algerian gas plays a significant role in meeting the continent’s demand, particularly in Southern Europe. This report explores which European countries are consuming Algerian gas, how much end consumers are paying for it, and whether Spain and Italy, as key transit countries, are profiting from redistributing Algerian gas.
1. Algerian Gas Exports to Europe
Algeria exports gas to Europe primarily through two pipelines and liquefied natural gas (LNG) shipments. The key pipelines are:
- Medgaz: Directly connecting Algeria to Spain.
- Trans-Mediterranean (TransMed) Pipeline: Running through Tunisia to Italy.
The major consumers of Algerian gas in Europe are Spain, Italy, and other Southern European countries. Algeria’s stable supply of gas has been crucial in balancing the European energy market, especially during times of crisis in other gas-supplying regions such as Russia.
2. Countries Consuming Algerian Gas
| Country | Percentage of Algerian Gas Imports (%) | Approximate Annual Volume (bcm) |
|---|---|---|
| Spain | 40 | 12 |
| Italy | 35 | 10.5 |
| France | 10 | 3 |
| Portugal | 8 | 2.4 |
| Greece | 3 | 0.9 |
| Other EU | 4 | 1.2 |
| Total | 100 | 30 |
Chart 1: Breakdown of Algerian Gas Consumption by European Countries (2023)
Spain and Italy are the largest importers of Algerian gas, utilizing both direct pipeline connections and LNG shipments to meet domestic energy needs. France and Portugal also rely on Algerian gas, though to a lesser extent.
3. End Consumer Prices in Europe for Algerian Gas
The price that consumers pay for Algerian gas varies across Europe, largely due to factors such as local taxes, transportation costs, and market regulations.
- Spain: End consumers are currently paying an average of €0.13 per kWh for gas, with significant price fluctuations due to market demand and energy policies.
- Italy: Consumers pay around €0.14 per kWh, slightly higher than Spain due to additional transit fees.
- France: The average price stands at €0.12 per kWh, lower than Spain and Italy due to different tax structures.
- Portugal: Gas prices are approximately €0.15 per kWh, reflecting its smaller market and higher import dependency.
Chart 2: Gas Prices for End Consumers (2023)
| Country | Average Price per kWh (€) |
|---|---|
| Spain | 0.13 |
| Italy | 0.14 |
| France | 0.12 |
| Portugal | 0.15 |
4. Spain and Italy: Profits from Redistributing Algerian Gas
Both Spain and Italy have the infrastructure and geographic advantage to redistribute Algerian gas to other European countries. The question arises whether these countries are profiting from this redistribution.
- Spain: With the Medgaz pipeline connecting directly to Spain, the country has become a vital gas hub for Europe. Spain benefits by charging transit fees for redistributing the gas to neighboring countries like France and Portugal. Spain’s energy companies, including Enagás, have reportedly made substantial profits by capitalizing on this role, though price volatility can affect overall profit margins.
- Italy: The TransMed pipeline positions Italy as a key player in the redistribution of Algerian gas to Southern and Eastern Europe. Italy’s Eni has developed significant partnerships with Algerian energy companies, and while Italy profits from the gas redistribution, the scale of profit is similar to Spain, although Italy faces higher transportation costs due to the longer transit route through Tunisia.
5. Conclusion and Future Outlook
Algerian gas continues to be an essential energy source for Europe, especially as the continent seeks to reduce its dependency on Russian gas. Spain and Italy, as the primary recipients of Algerian gas, play crucial roles in redistributing it to the rest of Europe. Both countries profit from transit fees and their advantageous geographical locations, making them key energy hubs in the region.
However, the future of Algeria’s gas exports to Europe will depend on several factors:
- The growth of renewable energy in Europe, which may reduce the overall demand for imported gas.
- The political stability of Algeria and its ability to maintain and expand its gas production.
- Europe’s energy transition goals, which could affect long-term contracts for natural gas imports.
Charts Summary
: Algerian Gas Consumption by Country (2023)
Chart 2: Gas Prices for End Consumers
