Sonatrach, the Algerian national energy company, has signed a supply contract for pipeline natural gas to be delivered to Germany via pipelines to southern European as the Germans now appear to be less enthusiastic about replacing Russian gas with LNG imports from the US and Qatar.
The pipeline gas agreement was signed during a visit to Algiers by German ministers and is with Leipzig-based VNG Handel & Vertrieb GmbH, a wholly owned subsidiary of VNG AG.
The VNG group is involved in energy trading and sales as well as natural gas and energy transportation by pipeline and gas storage.
No details were released on the length of the supply contract nor on the volumes of natural gas Algeria would be delivering to Germany from its output of more than 100 billion cubic metres per annum.
Sonatrach, the national oil and gas company with two LNG export plants at Arzew and Skikda on the Mediterranean Coast as well as gas pipelines connected to Spain and Italy, said the deal was signed at a ceremony chaired by Algeria’s Minister of Energy and Mines Mohamed Arkab.
Green-backed gas deal
The signing of the VNG natural gas deal was also witnessed by the visiting German Vice-Chancellor and Federal Minister of Economic Affairs and Climate Action, Robert Habeck, who is a member of the left-wing Green Party in the three-party German coalition government.
Rachid Hachichi, the Chief Executive of Sonatrach and his VNG counterpart Ulf Heitmüller spoke at the signing ceremony.
“I must express my satisfaction with the strengthening of the energy partnership with Europe through this historic contract with the company VNG, which will lead to the start of natural gas deliveries to Germany,” stated Hachichi.
Ulf Heitmüller, the CEO of VNG, said he was delighted to have been able to conclude a medium-term gas supply contract with Sonatrach.
“VNG thus becomes the first German company to purchase gas via pipeline from Algeria,” Heitmüller added.
Energy partnership
“This contract lays the foundations for a relationship of trust in terms of supply, opens new perspectives and strengthens the German-Algerian energy partnership,” stated the VNG CEO.
VNG’s Heitmüller added that Algerian natural gas would now be “an essential part” of guaranteed energy security for Germany,
“The purchase of Algerian gas via pipeline to Germany constitutes an additional diversification of VNG's purchasing portfolio, thus strengthening its position as a reliable partner towards its customers and making the company an important contributor to security of supplies,” Heitmüller declared.
