In Europe, the Strategic Importance of Algerian Natural Gas

Developing Algeria as a major natural gas exporter is an economic and strategic imperative for EU countries as North Sea production of the commodity enters terminal decline in the next decade. Algeria is already an important energy supplier to the Continent, but Europe will need expanded access to natural gas to offset the decline of its indigenous reserves. With large conventional and unconventional natural gas reserves and suitable export infrastructure, Algeria appears primed to succeed Norway as Europe's primary regional natural gas supplier.

Until recently, however, Algiers has been reluctant to facilitate the large-scale influxes of Western technical and financial capital necessary to boost natural gas production to the levels required to meet Europe's needs. And while the government has become more receptive to foreign involvement in recent years, security issues highlighted by the Ain Amenas hostage crisis will at least temporarily cool Western enthusiasm for investment in Algeria. But a European energy crunch is looming and other options are lacking. Continued investment in the Algerian energy sector from Europe — as well as attempts by European countries, particularly France, to stabilize the region — can therefore be expected.