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SONATRACH and ENI signed an agreement on Gas field Algiers, April 11th, 2022: “This agreement confirms the close collaboration between the two companies in the exploration and production of hydrocarbons, as well as in the field of new and renewable energies, such as solar energy, hydrogen, biofuels, CO2 capture, storage and use. This translates the will of Eni, a strategic partner, to continue its investments with SONATRACH and to strengthen its presence in Algeria.” https://sonatrach.com/wp-content/uploads/2022/04/CP-du-11-04-2022-Ar_Fr_An-1.pdf

Natural Gas market: Algeria Positioning itself as an alternative to Russia
(Based on VOA Afrique news article)

Algeria dreams of being Europe’s alternative to the so-called “indispensable” Russian gas, which is threatened by an international embargo. But it faces many challenges in achieving this goal.

The Algerian authorities have been showing an activism noticed on the international gas market, for several weeks. It must be said that the context lends itself to it.

The prospect of an international embargo on Russian gas due to the war in Ukraine, correlated with the soaring price of natural, opens a gap for other countries rich in natural gas.

Europe in particular and the United States, to a lesser extent, are currently in a pressing search for an alternative to Russia, the world’s second largest producer.

Need for positioning

It is therefore an opportunity to seize for Algeria, whose export revenues depend 90% on oil and gas revenues. Especially since many producers are now willing to make up, more or less, the supply deficit due to the sanctions against Russia, which is seeing its sales opportunities severely damaged.

In Africa alone, Nigeria, Egypt and even Libya are competing with Algeria, the world’s tenth largest producer, in this announced international reconfiguration of the gas market.

The battle comes at the right time, given the efforts recently made by the North African country to better exploit its gas potential.

Sonatrach has indeed projected, at the beginning of January 2022, 40 billion dollars of investments in the sector by 2026, including 8 billion dollars planned for this year. An initiative encouraged by the upturn in the country’s hydrocarbon sector in 2021, with a 75% increase in export earnings.

However, more will be needed for Algeria to be able to establish itself as a privileged supplier to Europe, as the CEO of Sonatrach suggested in the local press on February 27th.

The 11% of the country’s gas production destined for Europe will struggle to grow significantly in the current state of affairs, according to many observers in the hydrocarbon sector.

Algiers has more than 4,504 billion m3 of proven natural gas reserves, second in the ranking in Africa behind Nigeria, but this potential still remains essentially untapped. Local consumption is also increasing by 7% per year, to the point of accounting for almost half of total production.

Algeria’s ambitions concerning gas are legitimate because of its strong potential, but to achieve them it will need to make significant investments in infrastructure, but also in research for the expansion of its production capacity and its means of distribution”. Based on: https://www.voaafrique.com/a/marché-du-gaz-l-algérie-tente-de-se-positioner-comme-alternative-à-la-russie/6527917.html

PRESS RELEASE

SONATRACH and ENI signed an agreement in Gas field

Algiers, April 11th, 2022

In the presence of Mister Abdelmadjid TEBBOUNE, President of the Republic, and the Italian Prime Minister, Mister Mario DRAGHI, as well as both countries delegation’s members, the Chairman & Chief Executive Officer of SONATRACH, Mr. Toufik HAKKAR, and the Chief Executive Officer of Eni, Mr. Claudio Descalzi, have signed on this day a gas agreement.

This agreement will allow to boost the development of natural gas production projects through joint efforts of both companies and to increase exported gas volumes using the available capacities of Enrico Mattei gas pipeline (Transmed). This agreement will also permit to SONATRACH and Eni to set the natural gas sales prices levels in line with market conditions for the 2022-2023 year, in accordance with contractual price revision clauses.

This agreement confirms the close collaboration between the two companies in the exploration and production of hydrocarbons, as well as in the field of new and renewable energies, such as solar energy, hydrogen, biofuels, CO2 capture, storage and use. This translates the will of Eni, a strategic partner, to continue its investments with SONATRACH and to strengthen its presence in Algeria.

It is important to recall that the commercial relationship with Eni, which is considered as one of SONATRACH’s most important clients, dates back to 1977; the natural gas sales contract has provided Eni over the last two decades with a volume of more than 300 billion cubic meters to date. SONATRACH, Communication Department Algiers, April 11th, 2022https://sonatrach.com/wp-content/uploads/2022/04/CP-du-11-04-2022-Ar_Fr_An-1.pdf

Algeria is linked to Italy and Spain by gas pipelines – the Transmed-Enrico Mattei to Italy, the Medgaz and the GME to Spain. The last, which crosses Morocco, was closed in November due to political disagreements between Algeria and Morocco.
“L’Algérie est reliée aux deux pays par des gazoducs, le Transmed-Enrico Mattei vers l’Italie, le Medgaz et le GME vers l’Espagne. Ce dernier, qui traverse le Maroc, a été fermé en novembre dernier suite à un différend politique entre l’Algérie et le Maroc”. https://www.algerie-eco.com/2022/04/13/gaz-laccord-entre-sonatrach-et-eni-inquiete-madrid/

Énergie: l’Algérie se positionne comme alternative à la Russie