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Algeria, Russia to Produce 2Mln Cubic Meters of Gas Daily in 2026

Russian President Vladimir Putin meets Algerian Prime Minister Aymen Benabderrahmane on the sidelines of the Russia-Africa summit in St. Petersburg. (EPA)
Russian President Vladimir Putin meets Algerian Prime Minister Aymen Benabderrahmane on the sidelines of the Russia-Africa summit in St. Petersburg. (EPA)
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Algeria, Russia to Produce 2Mln Cubic Meters of Gas Daily in 2026

Russian President Vladimir Putin meets Algerian Prime Minister Aymen Benabderrahmane on the sidelines of the Russia-Africa summit in St. Petersburg. (EPA)
Russian President Vladimir Putin meets Algerian Prime Minister Aymen Benabderrahmane on the sidelines of the Russia-Africa summit in St. Petersburg. (EPA)

Russian Energy Minister Nikolay Shulginov announced on Thursday a partnership with Algeria to produce two million cubic meters of gas daily.  

Meanwhile, Algeria and Japan signed an agreement to establish a committee to develop economic cooperation and trade between their countries.   

The developments reflect a new Algerian approach in seeking new partners, away from the traditional partners, especially in Western Europe.   

Gazprom plans to start the production of hydrocarbons at the El Assel area in Algeria in 2026, Shulginov said in an interview with TASS on Thursday.   

The project is a $1 billion investment between Gazprom and Algerian oil company Sonatrach to develop two newly discovered fields in the El Assel area and Hassi Messaoud (900 km to the south of the capital).  

The partnership aims to produce two million cubic meters of natural gas daily, more than 1,000 tons of condensers, and more than 220 tons of liquefied petroleum gas.   

"We also discussed Gazprom’s operations in the country. In 2026, the company plans to start the production of hydrocarbons in the El Assel area," Shulginov said.  

Overall, Moscow and Algiers agreed to expand the presence of Russian companies in gas production projects in Algeria, the minister added.

The announcements were made in wake of Algerian President Abdelmadjid Tebboune’s visit to Russia in mid-June.

Gazprom and Sonatrach are jointly developing the El Assel area in the country. Gazprom International is the operator of the project at the geological exploration stage. Gazprom’s share in the project totals 49%, while Sonatrach holds 51%.   

Shulginov made his remarks ahead of the 2023 Russia–Africa Summit in St. Petersburg on Friday.   

Russian gas companies are ready to participate in projects on the supply of LNG and on the construction of gas infrastructure in Africa, he added.  

He further revealed Moscow’s plans to expand in Africa.   

Meanwhile, Algeria’s Acting Secretary General of the Ministry of Foreign Affairs and National Community Abroad Noureddine Khandoudi and Japan’s Ambassador to Algeria Kono Akira signed an agreement to set up the Algeria-Japan Joint Economic Committee.  

The Committee will be co-chaired by high-level government representatives, read the agreement.   

Japan’s Ambassador stressed that Japanese businessmen are interested in investing in Algeria.  

He hailed the “significant efforts exerted by Algeria in enhancing the business climate, especially with the issuance of the new investment law and other legislations.” 

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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).

Saudi Arabia has raised $12 billion from global debt markets in its first international bond issuance of the year, attracting bids worth nearly $37 billion. This demonstrates strong investor appetite for Saudi debt instruments.

The issuance comes just two days after the approval of the 2025 annual borrowing plan by Minister of Finance Mohammed Al-Jadaan. The plan estimates financing needs for the fiscal year at SAR 139 billion ($37 billion). The funds will be used to cover the projected SAR 101 billion ($26.8 billion) budget deficit for 2025, as well as repay SAR 38 billion ($10 billion) in principal debt obligations due this year.

The National Debt Management Center (NDMC) announced on Tuesday that the issuance includes three tranches: $5 billion in three-year bonds, $3 billion in six-year bonds, and $4 billion in ten-year bonds. Total demand for the bonds reached $37 billion, exceeding the issuance size by three times and reflecting robust investor interest.

The NDMC emphasized that this issuance aligns with its strategy to broaden the investor base and efficiently meet Saudi Arabia’s financing needs in global debt markets.

According to IFR, a fixed-income news service, the initial price guidance for the three-year bonds was set at 120 basis points above US Treasury yields. The six-year and ten-year bonds were priced at 130 and 140 basis points above the same benchmark, respectively.

Strong demand allowed Saudi Arabia to lower yields on the shorter-term bonds, further demonstrating investor confidence. Economists noted that the pricing above US Treasuries is attractive in the current market, showcasing trust in Saudi Arabia’s economic stability and financial strategies.

International confidence

Economic experts view this successful bond issuance as a testament to international confidence in Saudi Arabia’s robust economy and financial reforms. Dr. Mohammed Al-Qahtani, an economics professor at King Faisal University, said the move underscores Saudi Arabia’s commitment to diversifying financing tools both domestically and internationally. He added that the funds would support Vision 2030 projects, reduce pressure on domestic resources, and attract strong international investor interest.

The issuance strengthens Saudi Arabia’s ability to meet financial needs, expand its investor base, and establish a global financing network, he said, noting that it also facilitates entry into new markets, enabling the Kingdom to accelerate infrastructure projects and capital expenditures.

Dr. Ihsan Buhulaiga, founder of Joatha Business Development Consultants, described the 2025 budget as expansionary, aimed at meeting the financing needs of economic diversification programs. He stressed that the budget deficit is an “optional” one, reflecting a deliberate choice to prioritize Vision 2030 initiatives over immediate fiscal balance.

Buhulaiga explained that the Kingdom’s approach balances two options: limiting spending to available revenues, which would avoid deficits but delay Vision 2030 initiatives, or borrowing strategically to fund Vision 2030 goals. He said that the annual budget is just a component of the larger vision, which requires sustained funding until 2030.

He continued that Saudi Arabia’s fiscal space and creditworthiness allow it to borrow internationally at competitive rates, explaining that this flexibility ensures financial sustainability without compromising stability, even during challenges like the COVID-19 pandemic.

Saudi Arabia’s debt portfolio remains balanced, with two-thirds of its debt domestic and one-third external. As of Q3 2024, public debt stood at approximately SAR 1.2 trillion, below the 30% GDP ceiling. According to the Ministry of Finance, the budget deficit is expected to persist through 2027 but remain below 3% of GDP.

Buhulaiga highlighted the importance of capital expenditure, which reached SAR 186 billion in 2023 and is projected to rise to SAR 198 billion in 2024, a 6.5% increase.

He emphasized the government’s pivotal role in economic diversification, supported by investments from the Public Investment Fund (PIF), the National Development Fund, and its subsidiaries, including the Infrastructure Fund.

The PIF recently announced a $7 billion Murabaha credit facility, facilitated by Citigroup, Goldman Sachs International, and JPMorgan. Meanwhile, the NDMC arranged a $2.5 billion revolving credit facility earlier in January, compliant with Islamic principles, to address budgetary needs.

In November, Moody’s upgraded Saudi Arabia’s credit rating to Aa3, aligning with Fitch’s A+ rating, both with a stable outlook. S&P Global assigns the Kingdom an AA-1 rating with a positive outlook, reflecting a high ability to meet financial obligations with low credit risk.

The IMF estimates Saudi Arabia’s public debt-to-GDP ratio at 26.2% in 2024, describing it as low and sustainable. This is projected to rise to 35% by 2029 as foreign borrowing continues to play a key role in financing deficits.