Spain strengthens itself with gas from Algeria in the midst of war in the Middle East

MadridAmidst the war in the Middle East and its consequent impact on the global gas and oil market, many countries have entered into a long-distance race to find who can guarantee them the supply of these fossil fuels, or ensure that the link with their main suppliers is robust. This is the case of Spain, which has just announced the "reinforcement" of the energy partnership with Algeria, on which the supply of natural gas to the State depends because it is its main source. For example, between January and December 2025, 34.5% of the natural gas that arrived in Spain (128,504 GWh) came from the African country, while this year Algerian gas already accounts for 29.2% of this fossil fuel (19,243 GWh). In fact, this reinforcement will translate into nothing more and nothing less than an "expansion" of the gas volumes arriving in the State from Algeria. The same happened in 2022, when the war in Ukraine and the consequent decisions of the West regarding its ties with Moscow, including starting to detach from Russian gas in the long term, increased the capacity of the pipeline connecting Spain with the Algerian country: from 8,000 million cubic meters to 10,000 million.

"Algeria is a stable, reliable and constant supplier of gas. It has been Spain's main natural gas supplier for three years and I have acknowledged this to the Algerian president [Abdelmadjid] Tebboune. Today we have agreed to strengthen this strategic partnership in energy matters," stated the Minister of Foreign Affairs, José Manuel Albares, in statements to the media. This Thursday, Albares began an official trip to Algeria which will continue tomorrow, Friday. In addition to the meeting with Tebboune, he also met with the Minister of Hydrocarbons and Mines, Mohamed Arkab, who also oversees the activities of the state energy company Sonatrach and with whom he discussed the possibility of more Algerian gas reaching the State, according to the minister. "We have talked about a greater transfer of gas volume and we have talked about the context of the energy market at this time of war in the Middle East," said the minister.

Sonatrach is not just any company, but the Algerian key to the gas that arrives in Spain. Furthermore, it holds a 51% stake in the Maghreb gas pipeline (the remaining 49% is held by Naturgy) and controls over 4% of the share capital of Naturgy, the Spanish company that buys the most gas from it and with whom it has had a commercial relationship for over 40 years. However, Algerian-stamped natural gas does not only reach Spain through the gas pipeline, but also via LNG tankers, in the form of liquefied natural gas. In fact, this is the most viable route if more gas is to be received from Algeria, considering that the gas pipeline is almost at its maximum capacity, according to industry sources speaking to ARA. "It's not at 100%, but almost," they point out.

Rivalry with Italy?

But Spain is not the only energy partner that the North African country has. This Wednesday, the Italian Prime Minister, Giorgia Meloni, traveled to Algeria to ensure the supply of natural gas. The struggle for Algerian fuel, however, not only forces us to look at the destination country and its capacity to receive gas, but also at the possibility that Algeria can produce more gas and, at the same time, at what price. It is common for marketers to sign long-term contracts to avoid price volatility and having to go to what is called the spot market, where the cost changes every day according to supply and demand and the bill can skyrocket, as has been seen in a context of energy crisis.

Diplomatic crisis

Although Albares has boasted of an "excellent" relationship with Algeria, which he has defined as a "friendly country and strategic partner with whom we maintain constant dialogue and cooperation", the fact is that this has not been the tone in recent years. Relations between the two countries cooled after the Spanish government's shift on Western Sahara, which triggered an almost unprecedented diplomatic crisis. As a result, Algeria suspended the friendship treaty with Spain. This Thursday, Albares assured that the agreement is alive and announced high-level meetings.