gas, Algeria and Turkey

Algeria and Turkey agree to create a joint gas exploration company

The new company will be formed by the Algerian national oil and gas company Sonatrach and the Turkish corporation Turkish Petroleum.

Algeria and Turkey will establish a joint oil and natural gas exploration company, whose objective will be to carry out gas and oil drilling activities mainly in Algeria and other countries in the region, as announced yesterday by the Turkish Minister of Energy and Natural Resources, Fatih Dönmez, who travelled to the North African country as guest of honor to attend the II Algeria Invest Conference (AIC 2022).

Speaking to media, Dönmez confirmed that Turkey and Algeria had reached a consensus for the creation of a joint company between Sonatrach – the Algerian national oil and gas company – and the Turkish corporation Turkish Petroleum.

During his visit to Algeria, the minister discussed with his Algerian counterpart Mohamed Arkab other possible forms of collaboration in the field of energy and mining, and both agreed to support future and existing cooperation between the two countries in these fields.

Last year, Turkey and Algeria already launched a joint project to establish a petrochemical factory in the city of Adana, on Turkey’s Mediterranean coast; the project, which began in October 2021 with the participation of the Turkish investment holding Rönesans (with 66% of the shares of the new company) and the Algerian corporation Sonatrach (with 34%), includes an investment of 1.4 billion euros and its objective is the production in Turkey of several key industrial polymers.

Algeria, one of the major gas exporters to Europe

As a result of the war in Ukraine, Europe has been looking for alternative markets in recent months to buy gas, which has led to a notable increase in demand for Algerian gas, which in addition to its traditional export markets in Spain or Italy has seen as Eastern European countries are becoming more and more interested in its gas resources.

This large increase in demand for natural gas from Algeria has allowed the Maghreb country, a member of OPEC, to improve its current account balance and even increase the price at which it exports its gas to countries such as Spain, which imports almost half of the gas that consumes from Algeria. Sonatrach, the company with which Turkey plans to start a joint gas exploration company, is in fact the third largest supplier of natural gas to Europe, just behind Russia and Norway.