Algeria and China signed several co-operation pacts during Chinese President Hu Jintao's visit ending Wednesday, including an agreement on oil and gas, much needed by China to fuel runaway growth.
No details were available about the framework energy agreement, which along with accords on research and educational exchanges, and economic and technological co-operation were signed Tuesday evening. Officials said the agreement was aimed at developing bilateral trade in the oil and gas sector.
China also granted Algeria a "preferential loan" worth 48 million dollars (38 million euros) linked to a memorandum of understanding on economic co-operation.
Runaway growth in China has seen the country's demand for oil surge, with domestic production unable to keep pace, and Algeria is seeking to expand its markets for on oil and gas exports to fuel its economy.
To meet soaring demand, oil imports to China have shot up 30 percent in recent years, about half from the Middle East and the rest from all over the globe, including Africa, where Algeria and Gabon - both on Hu's itinerary - are key oil exporters to China.
Algeria, meanwhile, is seeking new outlets for its key energy resources after stepping up production and asking the Organisation of Petroleum Exporting Countries (Opec) to be allowed to increase it even further.
Algeria currently produces more than one million barrels of oil a day (bpd) and plans to step that up to 1.5 million bpd, despite its Opec ceiling being 782,000 bpd.
The hydrocarbons sector brought in 24 billion dollars last year, or 96 percent of Algeria's export revenues.
Chinese companies have been steadily increasing their presence in Algeria's oil and gas sector: oil company Sinopec signed a 525-million dollar (420-million euro) contract in 2002 to develop the Zarzaitine oil field in Algeria's Sahara desert.
And the China National Oil and Gas Exploration and Development Company is contracted to build an oil refinery near Adrar, also in the Algerian Sahara.
Furthermore, the China National Petroleum Corporation signed a contract worth 350 million dollars in July 2003, for importing oil from Algeria.
Algerian President Abdelaziz Bouteflika said at a dinner Tuesday in Hu's honour that conditions "today are favourable to encourage economic operators in both our countries to consolidate their relations by setting up partnerships."
The Algerian leader added that "the dynamism of the Chinese economy, its successful integration into the world economy and the key role that the country plays in the World Trade Organisation (WTO) open a vast field of expansion for our economic, commercial and technological relations."
Algeria is in the process of negotiating membership to the WTO, and has launched drastic reforms of its once state-managed economy to facilitate entry to the world body. The reforms have met with approval from the International Monetary Fund (IMF), although the Bretton Woods institution has urged Algiers to accelerate privatisation.
Hu's visit, which in addition to Algeria and Gabon took in Egypt, is due to end later Wednesday.
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