The Unexpected New Winners in the Global Energy War

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BIR REBAA, Algeria—Once-obscure corners of the energy world, from offshore Congo to Azerbaijan, are booming as Europe finds new sources of natural gas to replace the Russian supplies that once powered the continent. The shift is redrawing the world’s energy map at a rapid clip. In Bir Rebaa, deep in the Sahara, the Italian energy company Eni and Algeria’s state-owned energy company are drilling dozens of wells, producing gas from previously untapped fields in a matter of months.

Three pipelines beneath the Mediterranean Sea connect Algeria’s vast gas reserves to Europe. For much of the last decade, Russian gas giant Gazprom had kept prices low, pushing suppliers like Algeria out of the European market. Algeria has long had a strong alliance with Russia, buying large amounts of weapons from Moscow. Europe’s sudden thirst for Algerian natural gas is challenging that relationship.

Algerian officials are negotiating new gas deals with buyers in Germany, the Netherlands and elsewhere in Europe. Italy’s Eni is making major investments in Algerian production. The Algerian government is in talks with U.S. giants Chevron and Exxon Mobil on deals that would enable the companies to produce gas in the country for the first time.

A consortium led by London-based BP is boosting gas production in Azerbaijan, located in the former Soviet republic in the Caucasus. A 2,100-mile string of pipelines connects Azerbaijan to the heel of Italy. Azeri officials say they are ahead of schedule on a pledge to double gas deliveries to Europe by 2027.

All the activity is redirecting the flow of natural gas around the world. Gas once flowed primarily southwest from Russia toward the Mediterranean. Now Europe is preparing to boost imports from Africa, with gas flowing up through Italy to Austria and other countries. Global exports of LNG surged to a record high, fueled by a sharp increase in U.S. shipments to Europe.

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