The department of Research, Strategic Studies and International Relations
Tunis, March 4, 2024
Introduction:
Chaired by Algeria, the seventh summit of state leaders and heads of governments of the Gas Exporting Countries Forum was concluded. It spanned duration of three days, from February 29 to March 2, 2024.
The Algerian summit; which culminated in the consensual approval of the “Algiers Declaration”; witnessed significant and notable attendance by state leaders dominating the global energy production, including Qatar’s Sheikh Tamim bin Hamad Al Thani, Iranian President Ebrahim Raisi, Libyan Presidential Council President Mohammed Younis al-Manfi, Iraqi President Abdul Latif Jamal Rashid, and Tunisian President Kais Saied.
This highlights the significant importance of this session amidst challenging global geopolitical circumstances affecting energy markets, in addition to prevailing security tensions in various parts of the world.
Summit Outcomes: Boosting Maghreb Countries’ Standing in a critical international state
The Gas Exporting Countries Forum Summit, held in the Algerian capital at the end of February, holds immense significance given the current international context characterized by tensions in several regions worldwide. Energy experts agree that the outcomes of the Gas Summit will have a far-reaching impact, particularly considering the precarious global situation. It’s worth noting that the gas summit saw participation from Qatar, Iran, Iraq, Mauritania, Senegal, Mozambique, and Bolivia.
Experts in the energy sector highlight the crucial importance of the seventh summit of state leaders and governments of gas exporting countries (February 29 – March 2, 2024, in Algeria) against the backdrop of a highly dangerous global context. This context has been influenced by various events, including the Russian military operation in Ukraine and the Zionist aggression on the Gaza Strip, leading to increased global energy demand, especially since 65% of the world’s gas reserves are located in Russia and the Middle East.
Western countries ; which previously imported 45% of their gas needs from Russia; began seeking alternatives and new partners after the military operation. Algeria played a significant role in supplying Europe with gas in 2023, becoming France’s primary supplier again and topping the list as Spain’s main exporter. Algeria also exported 27 billion cubic meters to Italy, a 4 billion cubic meter increase, according to Algerian Ministry of Energy and Mines data, which emphasized the importance of new explorations in the Tawat, North Rekkan, Hassi Berkine, and other areas that will enhance Algerian production and storage in 2024 and the coming years.
Given the strategic role gas is playing, data from the International Energy Agency from 2024 to 2050 predicts an annual 2% increase in gas demand, reaching a 22% to 25% increase by 2050.
The outcomes of the Algerian Summit will not only affect global gas prices but also evaluate the strategies adopted by North African countries to enhance their export levels and integrate them into global market quantities, posing additional challenges in controlling modern technologies and techniques in gas fields.
Global Gas Forum amidst a Critical Global Situation
The forum came at a pivotal time considering the events in the global gas and oil market. Since the beginning of 2020, there has been a reverse event for gas-exporting and producing countries due to the COVID-19 pandemic, resulting in reduced demand and a contraction in the global economy. Subsequently, there was another reverse event for gas-consuming countries due to geopolitical shifts in Eastern Europe, putting pressure on gas-producing countries like Algeria, leading to increased demand and gas prices.
On the other hand, there’s another geopolitical shift occurring in the Red Sea region and the Gaza Strip due to continuous aggression by Israeli occupying forces. Given the significant gas reserves in the Gaza Sea, the occupation is attempting to seize these resources in partnership with the United States.
These geopolitical shifts have cast shadows on the gas market in terms of supply and demand, leading to a 1.6% annual growth in global gas demand until early 2024, according to the American Petroleum Institute. These shifts in demand and supply played a significant role in crucial decisions made by the Algerian forum, including Tunisian President’s emphasis on energy sovereignty, which Europe and the West must consider carefully.
An Important opportunity for coordination and dialogue among participating countries
The Gas Exporting Countries Forum Summit hosted by Algeria this year provided a vital opportunity for coordination and dialogue among countries given the increasing role of gas in the global energy mix in the coming years. This aims to appreciate their resources and strengthen their position in the global market. Coordination is a source of strength for the forum countries, founded to unify member states’ voices given the importance of gas in the global market and its minimal environmental impact, being a crucial element affecting the global energy mix by 2030.
The Tunisian Network: A Link to Europe and Maghreb Cooperation Council between Tunisia, Algeria, and Libya
Gas-exporting countries act as a vital link between Africa, Europe, and Asia. This includes the transnational gas pipeline passing through Tunisian territories, given its importance in securing gas supply to Europe and Tunisia. Algerian gas represents approximately 66% of Tunisia’s national consumption, with the extension of exploitation negotiated with the Italian side for a period of 10 years under Law No. 63 of 2019. Additionally, apart from maintaining the transit fee, a new fee of $143 million for transport capacity rental for ten years has been agreed upon. The Italian side will bear the costs of investment, maintenance, and the budgets of SOTUGAT and SERGAZ companies, providing 460 job opportunities, including the services company PMS.
The summit also highlighted Algeria’s and its neighboring countries’ significance in global energy markets due to their strategic location. They serve as significant suppliers to Europe and potential bridges between Africa and Europe for exporting African gas, notably through the Trans-Saharan Gas Pipeline project originating from Nigeria, aiming to export over 30 billion cubic meters annually.
Moreover, the gas summit addressed prevailing conditions in the Maghreb region, emphasizing the necessity to intensify and unify efforts to tackle economic and security challenges, benefiting the populations of the three countries: Tunisia, Algeria, and Libya. It was decided to hold a “Tripartite Maghreb Meeting” every three months, with the first to be held in Tunisia after the holy month of Ramadan.
Regarding the Gas Research Institute, which will be inaugurated during the same meeting, it will serve as a culmination of member states’ convergence for technological integration and developing new techniques to reduce production, drilling, transportation, and conversion costs. It will propel scientific research and technological development in the three Maghreb countries, offering solutions to common problems, enhancing integration, and maximizing resources, thus strengthening global transit networks from Algeria to Tunisia towards Europe.
In conclusion, amidst the complexities of global affairs, characterized by conflicts over land and settlements, the three Maghreb countries reaffirm their sovereignty over every inch of their territories amid a significant international focus on gas. The Algerian Declaration, titled “Natural Gas for a Secure and Sustainable Energy Future,” emphasizes several points reaffirming absolute and permanent sovereignty rights of member states over their natural gas resources, the importance of cooperation and coordination among member states for research, innovation, knowledge transfer, and gas-related technologies.
President Saied summarizes, stating, “The Palestinian people are deprived of the wealth of their sea, especially the gas in the Gaza coast, estimated at 1.4 trillion cubic feet.