Russia supplied 40% of Europe's gas imports before the fateful 24 February 2022. The Russian invasion of Ukraine, engineered by the Kremlin, broke the energy deck that had sustained continental relations for decades. From that moment on, Brussels set in motion a fast-track mechanism to find alternative sources of gas. Energy disconnection from Moscow went from being a pending task to a pressing necessity for EU partners.
Western sanctions against Russia for its military campaign in Ukraine forced the Kremlin to retaliate in the form of intermittent cuts in gas flows and periodic blockades of the Nord Stream 1 and 2 pipelines. Moscow wanted to turn energy into a lobbying tool to influence EU decision-making, a strategy from which the EU escaped thanks, among other things, to the appearance on the scene of other producers with the capacity to at least partially substitute Russian gas exports.
Three Arab countries have emerged as a viable alternative in a delicate context for Europe. The omens on the eve of winter were bleak. The weak energy situation, coupled with the economic crisis, seriously jeopardised member states' internal stability and, above all, European capitals' support for Ukraine's defence. But a triad of Arab countries cushioned the blow and seized the opportunity to gain weight and influence in the EU capital: Algeria, Qatar and Egypt.
Gas exports from the Maghreb country reached record levels in 2022: up to 56 billion cubic metres. The convulsive European scenario managed to reverse the downward trend of recent years and mitigate the socio-economic crisis that had been straining Algerian institutions since even before the outbreak of the Hirak in 2019, the protests to overthrow the regime. Rising energy prices swelled the volume of profits, which exceeded $50 billion in the last year alone, according to official figures.
Algeria does not have the largest energy reserves in Africa, nor is it the largest gas producer, but it is the largest exporter. Its proximity and connections to Europe have made it a preferred partner for EU partners. Top European leaders paraded through Algiers to curry favour with Algeria's top brass. Former Italian Prime Minister Mario Draghi, French President Emmanuel Macron and Belgian President of the European Council Charles Michel negotiated terms with Algerian President Abdelmadjid Tebboune.
Algeria's state oil company Sonatrach took advantage of the situation and, after revising its contracts with Italy's Eni, France's Total and Spain's Naturgy, earned an additional €4-5 billion. In the latter case, Algiers retaliated diplomatically with Madrid following the Spanish government's decision to align itself with the Moroccan thesis for Western Sahara. President Pedro Sánchez made a U-turn on the issue and supported autonomy under Moroccan sovereignty, a trump card that allowed Algeria to toughen its foreign stance and raise gas prices for the Spanish market. Months earlier it had cut off the Maghreb-Europe gas pipeline, which passed through Morocco before reaching the Iberian peninsula.
"Before the Russian invasion of Ukraine, Algiers only supplied the EU with 11 per cent of its gas needs, compared to 47 per cent from Russia. The African country exports about 83% of its gas to Europe, mostly to Italy and Spain, which in 2021 received 65% of Algeria's gas exports," writes expert Federica Saini Fasanotti in Geopolitical Intelligence Services (GIS). "Even so, the country now has limited production capacity that seriously jeopardises these expansion plans. Exploration, infrastructure development and investment are badly needed".
Francis Ghilès, a researcher at CIDOB, asserts that "gas production in Algeria has great potential". "Many areas of this vast country have not been explored or need to be re-examined with more modern techniques. However, it takes three to five years to develop a new gas field. Algeria will therefore need time and investment to fill the gap left by Russia," he explains.
Recently, the Algerian government has spoken out against the price cap on Russian gas imposed jointly by the G7 countries, the EU and Australia to reduce the profits the Kremlin extracts from oil and diverts to its war machine in Ukraine. The $60 per barrel limit for seaborne supplies would jeopardise investment in the sector, according to Algerian energy minister Mohamed Arkab. Algiers' stance, however, does not threaten the continuity of energy supplies to Europe.
Qatar has the third largest natural gas reserves in the world, behind only Russia and Iran. It is the Arab leader in liquefied natural gas (LNG) reserves and production, and aims to increase export volumes from 77 million tonnes to 126 million tonnes over the next decade. Most of its exports have historically been directed towards the Asian market, especially China, Japan and South Korea, with long-term contracts. However, since the outbreak of the war in Ukraine, the trend is beginning to change in a big way.
The tiny Gulf state is one of the main alternatives to Russian gas for the EU. In fact, Qatar's LNG exports have increased by 16% in the first nine months of 2022. This explains the recent visits to Doha by important EU political figures such as Charles Michel himself and German Economy Minister Robert Habeck. The vice-chancellor's visit served to conclude an energy agreement with Berlin under which Qatar will supply two million tonnes of gas per year for the next 15 years.
Qatar's exports doubled this summer compared to last year, reaching $9.2 billion in August. The Gulf country has broken its record for annual export revenues. It is already for many the Saudi Arabia of natural gas. It has huge reserves at very low costs, making it easier for the country to sell it for longer and more profitably than other major exporters such as Australia and Russia.
The country of the pharaohs lacks large reserves of natural gas, but that did not prevent it from doubling its energy revenues last year. The volume of exports grew by 171% over the previous year. Big words. Cairo has extracted a marginal profit of 5 billion euros in 2022, and not only that, it has intensified gas exploration in the eastern Mediterranean with foreign companies. Towards the end of the year, the North African country announced the discovery of a 'large' offshore gas field known as Zohr.
Abdel Fattah El Sisi's regime agreed with Israel, a partner in waters close to the eastern shore of the Mediterranean, to increase gas exports to Europe following a visit to Cairo by the president of the European Commission, Germany's Ursula von der Leyen. It is not the first such deal. Under another $15 billion contract signed in 2020, Israel already exports gas from an offshore field to Egypt, where it is liquefied and shipped to European countries. In return, the EU has promised to lend a hand in alleviating Egypt's emerging food crisis.
A fourth actor hoping to gain energy relevance in the run-up to 2023 is Mohamed Ould Ghazouani's Mauritania. The Sahel-Saharan country has every chance of joining the Natural Gas Exporters' Club after completing the construction of the facilities attached to the Great Turtle, a field discovered eight years ago on the Atlantic coast that it shares with Macky Sall's Senegal.
Turkmenistan is home to one of the world's largest gas reserves. The Central Asian country is the sixth richest in natural gas, behind only Russia, Iran and Qatar, as well as the United States and Saudi Arabia. Azerbaijan, the EU's energy partner since the dawn of Russia's invasion of Ukraine, pales in comparison. This is why Brussels has set its sights on this virtually unknown Central Asian nation.
But Turkey is in the middle. Turkish President Recep Tayyip Erdoğan will have the final say, although he has endorsed in principle plans to build a new gas pipeline connecting Turkmenistan and Europe. He did so in mid-December at a three-way summit with the presidents of Turkmenistan and Azerbaijan in the Turkmen resort town of Awaza. However, there is still work to be done to bring the project to fruition.
"The Central Asian country has been going through an economic crisis for about seven years and needs customers for its natural gas. But there is still no physical connection between Europe and Turkmenistan to transport this crucial commodity, and Turkmenistan's repressive government has a poor human rights record. More importantly, Turkmenistan seems determined to privilege its ties with Russia and Iran over any potential market opportunities in Europe," writes journalist Bruce Pannier at the Foreign Policy Research Institute. "As a result, there is no sign that Turkmenistan will be exporting gas to Europe anytime soon".