French energy major Total has signed an agreement to renew its partnership in the field of liquefied natural gas with the North African state of Algeria as Italian energy company Eni also advances with projects.
The accord between Total and Algerian oil and gas company Sonatrach allows the extension of the existing supply contracts for three additional years.
This will provide 2 million tonnes per annum of Algerian LNG to the French market, primarily through the LNG import terminal at Fos Cavaou, located east of the Mediterranean port of Marseilles.
Total said that the agreement also included the sub-charter of one of its LNG carriers to Sonatrach.
“This agreement is part of the long history of cooperation between Total and Sonatrach,” said Laurent Vivier, President for gas at Total.
“Thanks to the quality of our relationship we were able to conclude it in an extremely volatile market environment,” added Vivier.
“This new contract further enhances the flexibility of Total's LNG portfolio and strengthens our position as a major partner of Sonatrach,” he stated.
Total noted it was a historic player in the energy sector in Algeria for almost 70 years.
The group is active in oil and gas exploration and production, participating interests in the TFT II and Timimoun gas fields and in the oil fields of the Berkine Basin in southeast Algeria.
In addition, Total and Sonatrach have launched engineering studies for a petrochemical project in Western Algeria.
Algerian LNG exports have been falling and in the most recent official annual figures dropped by over 18 percent to about 10 million tonnes compared with 12.34MT the previous year from its two liquefaction plants at Skikda and Arzew on the Mediterranean Coast.
Italian energy company Eni and Sonatrach have completed the construction of the natural gas pipeline connecting the Bir Rebaa Nord and Menzel Ledjmet Est fields in the Berkine Basin.
The completion comes as Algeria is making three-pronged marketing efforts to direct new gas finds into domestic industry, for export as pipeline gas to Europe and as LNG to mostly European markets amid low prices and high global volumes.
The new Berkine Basin pipeline is 185 kilometres in length and 16 inches in diameter and will transport capacity of 7 million standard cubic metres of gas per day to markets.
That project will allow for the export of the associated gas produced in Block 403 and the development of the gas fields of the blocks of North Berkine, where the drilling of the first four wells have already been completed and linked.
Sonatrach has been increasing the capacity of its export infrastructure like the Medgaz gas pipeline to Spain, and building a new LNG jetty at the Skikda liquefaction plant.