Algeria and the European Union signed a memorandum of understanding on Sunday to develop energy cooperation, EU commission president Jose Manuel Barroso said.
"This is a strategic document, a tool to develop energy cooperation between Algeria and the EU," he told a news conference.
The agreement, which was under negotiation since 2008, was signed by Barroso and Algerian Prime Minister Abdelmalek Sellal.
It covers a broad section of cooperation in the conventional and renewable energy sectors, as well as the transfer of technology, and is expected to help boost investment in Algeria.
Algeria is Europe's third largest provider of natural gas after Russia and Norway, meeting 13-15 percent of the needs of the 28-member bloc.