For three days, Algeria will host leaders from 13 other nations in its capital of Algiers, including Russia, Iran, Qatar and Venezuela as the industry confronts waning demand for oil and gas and new competition from renewable energy sources.
The summit will offer participants a chance to coordinate on investments and ties with purchasing countries and to further develop production capacity. Officials have also indicated the summit will provide a venue to showcase Algeria's growing role as a secure and reliable energy supplier.
Algerian President Abdelmajid Tebboune said in a message on the summit’s website that the gathering underscores how “natural gas is increasingly in demand as a crucial energy source for socio-economic development, being one of the main clean and environmentally friendly alternative energy sources.”
As European countries have tried to wean themselves off Russian energy, Algeria has emerged as the continent's second largest pipeline supplier of gas, after Norway. It is the top supplier of gas to Spain and also Italy, whose Premier Giorgia Meloni visited last year. Algeria's state-owned energy company Sonatrach recently signed a deal to sell natural gas to Germany's VNG.
Karim Allam, an oil and gas industry analyst, said the summit would provide an opportunity to make the case for gas as “a product of the future.”
Algeria "wants to finalize long-term contracts that will provide security for the future, while seeking to bolster its status as a credible and serious producer country,” he said.
FILE—Officials and delegates walk past flags as they attend the seventh Gas Exporting Countries Forum hosted in Algeria, February 29, 2024.
However, headwinds remain. Despite aggressive plans to expand production between now and 2030, Algeria has struggled to deliver more gas to Europe at the pace promised. Sonatrach continues to confront infrastructure needs, slowing demand for gas and new competition from countries like Qatar and the United Arab Emirates.
Algeria's growing population is also projected to increase energy demands, much like Egypt, the Arab world's most populous country.
“There's a growing concern over the necessity to balance domestic needs with the export commitment,” said Alberto Rizzi, a researcher at the European Council on Foreign Relations. “And there’s a game over who the last man standing is — who can produce at the price, volume and with the least pollution.”
Algeria has made preliminary moves to invest in renewable energy, specifically green hydrogen power, but continues to be heavily invested in fossil fuels. Oil and gas revenue accounted 38% of the country's budget from 2016 to 2021, according to World Bank figures.