Macron seeks warmer ties with Algeria, but gas deal unlikely

PARIS • French President Emmanuel Macron travels this week to Algeria, a former French colony and one of the world's largest gas producers. But it is unlikely that the President will return with the one thing that has European leaders scouring the globe for: commitments for alternative supplies of liquefied natural gas.

Even though Mr Macron will be accompanied by Ms Catherine Macgregor, chief executive of utility Engie SA, the trip is not about replacing gas imports from Russia, according to French officials close to the President. Furthermore, it is unlikely Algeria has excess supply to offer France.

Energy markets have been thrown into turmoil since Russia started squeezing gas supplies to Europe, leading German Chancellor Olaf Scholz to accuse Moscow of using energy as a weapon to retaliate against European Union sanctions.

Concerns over the economy pushed the euro to a record low against the US dollar this week, with inflation at the fastest in years.

Mr Macron warned of potential hardships in coming months and asked the French to "accept paying the price for our freedom and our values", in a speech last week.

Algeria is already Europe's biggest gas supplier after Russia and Norway, including to France. It has discovered new reservoirs that have drawn growing interest.

Rather than clinching new commitments for energy supplies, Mr Macron will be looking to reset relations after years of tensions, said the officials who asked not to be identified as per standard practice.

In a three-day visit, Mr Macron will stop in the capital Algiers and Oran, Algeria's second-largest city.

Mr Macron's 2017 presidential win was warmly welcomed by Algiers. On the campaign trail, he denounced what he called "crimes against humanity" committed by France during its colonial rule of Algeria.

His tone changed, however, as Algeria's ageing military leaders, who have ruled since independence from France, tried to stem mass pro-democracy protests. He accused Algeria's "political-military system" of being "tired" and stoking "hatred towards France".

In response, Algeria closed its airspace to French military planes, affecting peacekeeping operations in Mali, and recalled its ambassador to Paris over what it called "unacceptable interference in its internal affairs".

Even if Mr Macron manages to make amends during his visit, Algeria's state-run energy company, lacking investment, says it does not have the capacity to provide more to France in the short term.

The best Mr Macron can hope for is to try to lay the foundations for a new relationship, according to Mr Ali Bey Nasri, president of the National Association of Algerian Exporters.

"France has to start seeing Algeria like a partner," he said.

BLOOMBERG