Algeria and Spain Relaunch Friendship Treaty, Eye Increased Gas Exports
Takeaway
The 12.5% increase in Algerian gas exports to Spain via Medgaz will directly benefit Naturgy, the Spanish utility with long-term supply contracts. LNG traders should monitor capacity utilization on Medgaz, as increased volumes to Spain may reduce spot availability and put upward pressure on prices in the Iberian market.
Algeria and Spain are moving to strengthen ties, with Spanish Foreign Minister José Manuel Albares visiting Algiers on March 26, 2026, for a two-day official visit. During the visit, Algerian President Abdelmadjid Tebboune received Albares, signaling a renewed commitment to bilateral relations. A key outcome of the visit was the decision to reactivate the Treaty of Friendship, Good Neighborliness, and Cooperation, initially signed in October 2002 but suspended by Algeria in June 2022 following a diplomatic rift. Algeria is planning to increase gas exports to Spain from 28 million to 32 million cubic meters per day, a 12.5% increase, via the Medgaz pipeline.
The restoration of the friendship treaty marks a significant step in mending relations that soured in March 2022 after Spain aligned itself with Morocco's position on Western Sahara. The diplomatic crisis led to Algeria suspending the treaty and reviewing economic ties. However, with Europe facing an energy crisis, Algeria's gas reserves have become strategically important for Spain. The renewed partnership underscores Algeria's efforts to diversify its economic partnerships and leverage its energy resources to strengthen its position in the region.
The increase in gas exports via the Medgaz pipeline is crucial for Spain's energy security, especially given the volatility in European energy markets. The pipeline provides a direct link between the two countries, ensuring a stable supply of Algerian gas to the Spanish market. The planned increase of 4 million cubic meters per day represents a substantial boost in capacity. This development occurs as Spanish exports to Algeria experienced a 270% increase in 2025, reaching a value of 2.133 billion euros.
The restored relationship and increased gas exports stand to benefit both Algeria and Spain. Spain gains a reliable energy supplier, while Algeria strengthens its economic ties with a key European partner. The energy sector will see increased investment and collaboration, potentially leading to further infrastructure development. The revival of the treaty could also positively impact trade flows, with Spanish Foreign Minister Albares predicting a \"spectacular increase\" in Spanish exports to Algeria.
Looking ahead, the focus will be on implementing the terms of the reactivated friendship treaty and ensuring the smooth flow of increased gas exports. Further discussions are expected on expanding cooperation in other sectors, such as trade, investment, and security. Any shifts in Spain's position on Western Sahara or significant fluctuations in European energy demand could pose risks to the stability of this renewed partnership.