Algeria is positioning itself as Europe’s go-to energy partner for the post-Russia era, with a sweeping 2026 strategy that combines the launch of the long-awaited Trans-Saharan Gas Pipeline, a new upstream licensing round, major pipeline maintenance overhauls, and the early development of a green hydrogen export industry.
Construction of the 4,000-km Trans-Saharan Gas Pipeline is set to begin after Ramadan 2026. Designed to carry up to 30 billion cubic metres of gas per year from Nigeria through Algeria and into European markets, the megaproject would cement Algeria’s role as a critical transit and supply hub for a continent that has been seeking alternatives to Russian gas following Europe’s full ban on Russian gas imports in January 2026.
To keep existing export infrastructure in top shape, state energy company Sonatrach — working alongside Chinese partners — is inspecting and upgrading approximately 3,576 km of pipeline to reinforce flows through the Medgaz link to Spain and the Transmed corridor to Italy, and modernizing long-distance networks to reduce outages and improve operational efficiency.
Natural gas accounts for 90% of Algeria’s exports, but production at ageing fields is declining. To reverse that trend, the country’s national hydrocarbons agency ALNAFT is preparing to launch its 2026 licensing round, targeting frontier acreage and unconventional resources including vast shale gas potential. Sonatrach is simultaneously advancing major production projects: a $5.4 billion production-sharing agreement with Saudi Arabia’s Midad Energy in the Illizi Basin, and a $2.3 billion upgrade of the Hassi R’Mel gas hub. The Illizi development alone could unlock nearly 125 billion cubic metres of gas, while new booster stations at Hassi R’Mel are expected online from late 2026.
Looking further ahead, Algeria is also building out a green hydrogen industry targeting 40 terawatt-hours of hydrogen and derivatives annually by 2040. The country is developing a 50-megawatt semi-industrial green hydrogen project in Arzew and accelerating solar deployment, with 3,200 MW of new capacity slated for completion by late 2026. Export infrastructure is also taking shape: Algeria launched a feasibility study last November for the 3,300-km SoutH2 Corridor, a proposed pipeline capable of transporting up to 4 million tonnes of green hydrogen per year by 2030, connecting Algeria and Tunisia to industrial hubs in Italy, Austria, and Germany, with approximately 70% of the route repurposing existing gas infrastructure.
Source: energycapitalpower.com