Algeria, EU Deepen Energy Ties Amid Shifting Geopolitics
Image: Echorouk
Takeaway
The deepening energy partnership between Algeria and the EU presents opportunities for European energy companies seeking to diversify their gas supply away from Russia. Investors should monitor the progress of the SoutH2 Corridor project and the implementation of the EU Methane Regulation, as these factors will influence the long-term competitiveness of Algerian gas exports. Companies involved in renewable energy technologies and hydrogen production could also benefit from increased cooperation between Algeria and the EU.
Algeria and the European Union (EU) reaffirmed their strategic energy partnership during the sixth high-level energy dialogue in Algiers on February 12, 2026. The meeting was co-chaired by Algeria's Minister of State, Minister of Hydrocarbons and Mines Mohamed Arkab, Energy Minister Mourad Adjal, and European Commissioner for Energy and Housing Dan Jørgensen. Discussions centered on strengthening energy relations, particularly in natural gas, renewable energy, and green hydrogen, amidst the complex global energy landscape and the accelerating energy transition.
The EU views Algeria as a promising regional market and a strategic energy partner, especially given the geopolitical shifts triggered by the Russia-Ukraine crisis. Europe is seeking to reduce its reliance on Russian gas by the end of 2027 and sees Algeria as a reliable alternative. In 2025, nearly 95% of Algeria's total liquefied natural gas (LNG) exports went to Europe. This dependence is mutual, as Algeria relies on the European market for its energy demand. The Memorandum of Understanding on the strategic partnership between Algeria and the EU, signed in 2013, aims to develop and strengthen energy relations while respecting the balance of interests between the two parties.
Both sides are exploring increased European investment in Algeria's hydrocarbons sector, particularly in natural gas development. Discussions also covered reducing fugitive methane emissions and ensuring harmonized implementation of the EU Methane Regulation to maintain Algerian gas access to the EU market. Algeria overtook the United States as Spain's leading LNG supplier in 2025. Italy imported nearly 20.1 billion cubic meters of gas via pipeline from Algeria through the Transmed pipeline in 2025, accounting for about 31% of its total gas imports.
The EU has granted Algerian LNG exemptions from a newly introduced enhanced origin-declaration mechanism, highlighting Algeria's priority partner status. The SoutH2 Corridor project, designed to establish a hydrogen transport link between Algeria and Europe, was also a key topic. The EU is contributing to the project "Support for the energy transition and the development of hydrogen". The TaqatHy+ program, co-financed by the EU (€15 million) and Germany (€13 million) and implemented by GIZ, supports renewable energy deployment, grid integration, hydrogen economy development, energy efficiency, and methane emission reduction.
Both parties recognized the growing importance of electricity interconnections between Algeria and the EU and agreed to enhance cooperation on regulatory frameworks and investments to advance cross-border electricity links. Future discussions will likely focus on specific regulatory requirements and investment strategies to facilitate these interconnections. Continued investment in upstream gas production, infrastructure modernization, and domestic energy diversification will be critical for Algeria to maintain its position as a key energy partner.