LNG

Algeria and Italy said they had signed an agreement for the North African nation to supply more natural gas to European Union member Italy to replace falling supplies from Russia.

Algeria plans to export liquefied natural gas to Asia and South America after the refurbishment of the Skikda liquefaction and export plant on the North African nation’s Mediterranean coast with new storage facilities and a larger jetty to be constructed by a consortium of Chinese contractors.

Toufik Hakkar, the Chief Executive of state-run Algerian oil and gas company Sonatrach, made the statement during a briefing following the signing on February 17 of an engineering contract for the Skikda LNG upgrade.

Sonatrach signed an agreement with two Chinese engineering companies to build a new LNG storage tank with 150,000 cubic metres capacity and to modernize the jetty and loading facilities.

The contract is with China’s Sinopec Luoyang Engineering Co.  (LPEC) and Sinopec International Petroleum Services Corp. (SIPS).

The work will also include the dismantling of two 20-year-old storage tanks at the Skikda facility.

The Skikda plant currently has 4.5 million tonnes per annum of LNG export capacity.

“The loading capacities and the capacities of the port of Skikda do not make it possible to supply the larger ships serving distant markets,” said Hakkar.

Renovation

“With the renovation of the port and the construction of this new storage tank, we will be able to go to these markets which constitute a strong added value,” explained the CEO, mentioning Asia and South America.

Sonatrach has several contracts for the Skikda plant, including one with TotalEnergies to supply 2 MTPA of LNG to the French market, primarily through the LNG terminal at Fos Cavaou near Marseille.

The agreement also includes the sub-charter of a TotalEnergies LNG carrier to Sonatrach.

The supplies for TotalEnergies are delivered ex-ship (DES) to Fos Cavaou through to December 2023.

“This engineering, procurement and construction contract is worth 25 billion Algerian dinars ($178 million) and will take 40 months to complete,” stated Hakkar.

The contract was signed by Sonatrach’s Director of Central Engineering and Project Management Farredj Aoudjehane and the SIPS General Manager in Algeria, Xu Zhenqiang.

“The agreement marks a new stage of cooperation between Sonatrach and Sinopec International Petroleum Services,” said Xu.

“During the implementation period, Sinopec will do its best to guarantee the completion of this project under the necessary safety conditions and with high quality within the set deadlines,” added the Chinese executive.

April 13 (LNG) - The 171,800 cubic metres capacity liquefied natural gas carrier, the “Tessala”, is scheduled to deliver a cargo on April 15 to the UK Isle of Grain LNG import terminal, operated by National Grid Plc on the Medway-Thames estuary, southeast of London. Shipping data showed that the “Tessala” left the Algerian export plant at Arzew on April 10 for the four-day voyage from the Mediterranean to England.

   The UK National Balancing Point natural gas benchmark price has been rising in recent days because of colder weather and was last at the equivalent of $6.75 per million British thermal units, while the main Continental European price, the Dutch Title Transfer Facility (TTF), was higher at the equivalent of $6.85 per MMBtu.

Algerian state energy company Sonatrach, one of the main suppliers of LNG and pipeline natural gas to Europe, has commissioned the Boosting III project for the Hassi R'mel gas hub in Laghouat province of central Algeria, which produces and supplies over half of the nation’s natural gas.