An in-depth report – International Supermarket News

Algeria is one of Europe’s main gas suppliers, and in recent years its role in the European energy market has become increasingly important. As Europe seeks to diversify its energy sources, Algerian gas plays an important role in meeting the continent’s demand, particularly in Southern Europe. This report explores which European countries consume Algerian gas, how much end consumers pay for it and whether Spain and Italy, as key transit countries, benefit from the redistribution of Algerian gas.

1. Algerian gas exports to Europe

Algeria exports gas to Europe mainly via two pipelines and shipments of liquefied natural gas (LNG). The main pipelines are:

• Medgaz: Directly connecting Algeria to Spain.
• Trans-Mediterranean Pipeline (TransMed): Crossing Tunisia to Italy.

The main consumers of Algerian gas in Europe are Spain, Italy and other southern European countries. Algeria’s stable gas supply has been crucial to balancing the European energy market, especially in times of crisis in other gas-supplying regions such as Russia.

2. Algerian gas consumer countries

Graph 1: Distribution of Algerian gas consumption by European country (2023)

Spain and Italy are the largest importers of Algerian gas, using both direct pipeline connections and LNG shipments to meet domestic energy needs. France and Portugal also depend on Algerian gas, but to a lesser extent.

3. Final consumer prices in Europe for Algerian gas

The price consumers pay for Algerian gas varies across Europe, largely due to factors such as local taxes, transportation costs and market regulations.

• Spain: End consumers currently pay on average €0.13 per kWh for gas, with significant price fluctuations due to market demand and energy policies.
• Italy: Consumers pay around €0.14 per kWhslightly higher than Spain due to additional transit costs.
• France: The average price is €0.12 per kWhlower than Spain and Italy due to different tax structures.
• Portugal: Gas prices are around €0.15 per kWhreflecting its smaller market and greater dependence on imports.

Graph 2: Gas prices for end consumers (2023)

4. Spain and Italy: benefits of the redistribution of Algerian gas
Both Spain and Italy have the infrastructure and geographic advantage to redistribute Algerian gas to other European countries. The question arises as to whether these countries benefit from this redistribution.

Spain: With the Medgaz gas pipeline connected directly to Spain, the country has become a vital gas hub for Europe. Spain takes advantage of this by charging transit fees to redistribute gas to neighboring countries like France and Portugal. Spanish energy companies, including Enagaswould have made substantial profits by capitalizing on this role, although price volatility can affect overall profit margins.
Italy: THE TransMed This gas pipeline positions Italy as a key player in the redistribution of Algerian gas to Southern and Eastern Europe. Italy Eni has developed significant partnerships with Algerian energy companies, and although Italy benefits from the redistribution of gas, the scale of the benefits is similar to that of Spain, even though Italy faces transport costs higher due to the longer transit route through Tunisia.

5. Conclusion and future outlook
Algerian gas continues to be a key energy source for Europe, especially as the continent seeks to reduce its dependence on Russian gas. Spain and Italy, as the main recipients of Algerian gas, play a crucial role in its redistribution to the rest of Europe. Both countries benefit from transit costs and their advantageous geographic location, making them key energy hubs in the region.
However, the future of Algerian gas exports to Europe will depend on several factors:

The growth of renewable energy in Europe, which could reduce overall demand for imported gas.
Algeria's political stability and its ability to maintain and increase its gas production.
Europe's energy transition goals, which could affect long-term contracts for natural gas imports.

Summary of charts

: Algerian gas consumption by country (2023)

Graph 2: Gas prices for end consumers