Targeting Algeria

Europe needs Algerian natural gas, and Algeria needs European investment, but Islamist militants stand in their way.

By Ola Wam.

Shortly before sunrise on March 18 of this year, the In Salah gas plant—a joint venture between BP, Statoil, and Algerian Sonatrach, situated in Algeria’s desert expanse—was hit by two rocket-propelled grenades. The attack did not cause significant damage, but was a startling reminder of the 2013 attacks on the In Amenas gas plant that killed 39 workers.

Algeria is one of the most significant suppliers of natural gas to Europe and provides a viable alternative to Russian gas, but in order to fulfill potential demand, the country’s natural gas sector needs significant development. Algeria is trying its best to entice European companies, but businesses are wary of expanding into the Saharan territory of Islamist militants.

Europe Needs Gas

Even as nations discuss a future free from hydrocarbons in order to prevent climate change, the European Union still relies heavily on gas, most of it imported. With Russia now on a political collision course with Europe over Ukraine, Algeria is becoming an even more important supplier.

Of the 16.55 trillion cubic feet (Tcf) of gas consumed by E.U. countries in 2013, 88 percent of it was imported from outside the union. Russia was the largest supplier, supplying 39 percent of imports; Norway, which is not in the E.U., was second with 33 percent; and Algeria was not far behind, with close to 22 percent.

In its 2014 Energy Security Strategy, the E.U. set clear ambitions for reducing its dependence on Russian gas, but Norway is not able to make up the slack on its own. Norway has an annual production of 3.9 Tcf of gas and proven reserves of 72 Tcf. Its production is expected to remain relatively stable in the coming five years, but according to the U.S. Energy Information Administration (EIA), investments in exploration and development of new gas fields have declined dramatically and will likely …

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