The chief executives of Italian energy company Eni and Algerian LNG, pipeline natural gas and oil group Sonatrach have signed an accord related to the North African nation’s onshore Berkine Basin.
Sonatrach CEO Toufik Hakkar and his Eni counterpart Claudio Descalzi, signed the deal in the presence of the Algerian Minister of Energy and Mines Mohamed Arkab and Italian Ambassador to Algeria Giovanni Pugliese.
“Eni and Sonatrach also signed a memorandum of understanding for cooperation on initiatives in the energy transition,” said a statement.
“The agreements are testimony to the commitment of Sonatrach and Eni to continue the shared strategy of accelerated project development,” said Eni CEO Descalzi.
The Algerian Government noted that the Berkine Basin contract was the first ever signed under the aegis of the new Algerian oil law and covers an area of 7,880 square kilometres in the southern part of the Berkine Basin, in close proximity to the company's current production assets.
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Descalzi and Hakkar stated that they shared the commitment to create an ambitious exploration and development programme in the area.
“In the first phase, the project envisages the fast-tracked development of reserves estimated at 135 million barrels of oil equivalent, with a start-up of production expected by the end of 2022,” it added.
“This project will enhance synergies with existing plants. The entry into force of the new contract is subject to approval by the competent Algerian authorities,” they stated.
Eni has been present in Algeria since 1981 and is the operator of various permits with an equity production in the country of 95,000 barrels of oil equivalent per day.
Eni also recently agreed earlier in December 2021 to sell a minority stake in two pipelines involved in transporting natural gas from Algeria to Italy for €385 million ($435M) to Italian LNG terminal and gas grid operator Snam.
Eni said that deal involved Snam purchasing a 49.9 percent stake in the onshore gas pipelines running from Algeria to the Tunisia border and the Tunisia coast (TTPC), and the offshore gas pipelines connecting the Tunisian coast to Italy (TMPC).
Eni said the transaction would create synergies in the respective areas of expertise in gas transport on a strategic route for the security of the natural gas supply to Italy.
Snam said the deal consolidated Snam’s central role in Italy’s security of supply as well as in energy transport from the Mediterranean region.
Snam operates the gas grid and the onshore Panigaglia facility in the northwest near Genoa as well as having a 49 percent stake in the LNG facility, the “FSRU Toscana”, which is deployed off the Italian west coast.
