Albania Gas Industry Characteristics

Gas market

In the 1980s, the petroleum and bitumen enterprises employed 10% of Albania’s industrial work force, controlled 25% of the country’s industrial capital and received almost 33% of its industrial investment funds. Nevertheless, the industry’s share of the country’s gross industrial production fell from 8.1% in 1980 to 6.6% in 1982 and to perhaps as little as 5% in 1985.
Petroleum was the first industry to attract direct foreign investment after the communist economic system broke down. In 1990 and 1991, the Albanian Petroleum and Gas Directorate entered into negotiations with foreign drilling and exploration firms for onshore and offshore prospecting. In March 1991, the Albanian government and a German company, Denimex, signed a USD 500 million contract for seismological studies, well drilling, and production preparation. Albania also negotiated exploration contracts with Agip of Italy and Occidental Petroleum, Chevron, and Hamilton Oil of the United States.

Almost all infrastructure, the railways, roads, energy utilities, water and canals are still owned by the state and years of civil unrest have left them in economic chaos. The ministry responsible for gas is the National Agency for Energy.
According to a World Bank study, gas is expected to come into commercial operation in Albania by 2008.

The state-owned gas company is Servcom; however, the Albanian government announced in October 1999 that it would launch sale procedures for several large state-owned companies, including Servcom.


The country’s gas industry centres on 11 fields but output is low and imports are required to meet domestic needs. The government is anxious to develop its gas industry, and under EC-Phare’s Multi-Country Energy Programme it is being encouraged to do so.

Fertiliser plants consume about 40% of Albania’s annual natural gas production.


Albania is the only country in Europe which is not connected to an international gas pipeline. Studies done so far in the gas field were aimed at remedying this situation via the identification of different alternatives to connect Albania with the European gas network.