Billions of investments Turkish-Algerian cooperation in the field of energy

Amid the crisis in the diplomatic scene between France and Algeria, Turkey is seeking to take advantage of the political and economic rapprochement with Algeria to boost its share of Algerian gas at the expense of gas coming from Russia and Iran.

In light of the growing problems of energy supply at the global level, and the acceleration of Turkish steps in order to secure its energy supplies, whether by encouraging investments in renewable natural alternatives, or by searching for new suppliers with which it has friendly and strategic relations.

As part of its efforts to withdraw the gas card from the hands of Tehran and Moscow, Ankara has succeeded during the past few years in reducing its imports of natural gas from Russia and Iran at the expense of increasing its imports from other friendly countries, such as Azerbaijan and Algeria.

As a result of the recent growing political and economic rapprochement between the two countries, Algerian President Abdelmadjid Tebboune received, last Wednesday, Turkish Minister of Energy and Natural Resources Fatih Donmez in the Algerian capital, and they discussed opportunities to enhance cooperation between the two countries, especially in the field of energy, and natural gas in particular.

Growing affinity

Amid the crisis that clouded the diplomatic scene between France and Algeria, Turkish relations have been witnessing a rapid growth in recent years, especially since the two countries have identical visions on many international and regional issues, starting with the Palestinian issue, passing through the issues of Tunisia and Libya, and ending with France's destructive role in the African continent.

This rapprochement has had a growing impact on encouraging mutual investments between the two countries since the signing of the joint cooperation treaty 15 years ago, which opened the way for Turkish investments in Algeria, reaching nearly $5 billion, while Algerian investments in Turkey are concentrated in the field of energy, which is a very important sector for for Ankara.

Cultural relations are also witnessing great interest in recent times, as the two countries announced the opening of an Algerian cultural center in Turkey and another Turkish center in Algeria, a center for Turkish language education was inaugurated in Algeria, and student exchange agreements were concluded between the two countries.

Promising cooperation in the field of energy

Following his meeting with the Algerian Minister of Energy and Mines, Mohamed Arkab, last Wednesday, Donmez confirmed the existence of many areas for investment cooperation between Turkey and Algeria, pointing to the importance of activating the available capabilities.

During his speech, the minister pointed to the encouragement of mutual investments between the two countries, especially in the fields of energy, noting the partnership with the Algerian hydrocarbon company Sonatrach (governmental) in building a facility for the production of polypropylene (a plastic material) within the large industrial zone for petrochemicals in the Caza. Ceyhan, in the Turkish state of Adana, with an investment of $1.7 billion.

Just as they cooperate in the petrochemical and hydrocarbon industry, the two countries stress the need to develop opportunities and possibilities for investment and partnership in the energy sector, especially in the field of electricity production and transmission, as well as providing all forms of support and exchanging experiences in the field of research and exploration for natural gas in the depths of the Mediterranean.

Under the new hydrocarbons law that entered into force at the end of 2019, Algeria soon offered Turkey new partnerships in the energy and mining sector, amid a diplomatic crisis with France, which had acquired most of Algeria’s energy projects, and invited it to explore business opportunities and future prospects. For investment, foreign companies will be granted incentives and tax and customs exemptions, especially during the period of research, exploration and exploration.

Gas supply security

The dilemma of Turkey’s energy extensions has always been a great concern over the past decades, as Turkey does not have many traditional natural energy sources such as oil and gas, and it needs to import more than 95% of its energy needs from abroad with a very high bill of about 40 billion dollars on average, which is a major reason In the trade balance deficit witnessed by the Turkish economy, despite the fact that Turkish exports reached more than 215 billion dollars this year.

In addition to Turkey's dependence on renewable resources to generate about 52% of its electricity needs, and to explore for gas in its territorial waters in the "Blue Homeland", it has increased its dependence on gas coming from Algeria and Azerbaijan at the expense of Russia and Iran.

While Turkey's dependence on Russian and Iranian gas reached 70% in 2009, this percentage decreased to 45% in 2020. On the other hand, the amount of gas coming to Turkey from Azerbaijan and Algeria was estimated at about 26% in 2009, before rising to about 36 % last year, but the percentage is expected to rise to much more in the coming years in light of the rapid growth of relations.