LNG

Baker Hughes, the US liquefied natural gas equipment-maker and energy services and technology company, was awarded a contract from Algerian state-owned oil and gas company Sonatrach for a gas-boosting project to supply Italy and the European Union.

The project is in the Hassi R’Mel gas field in Laghouat province of central Algeria, which produces and supplies over half of the North African nation’s natural gas.

The giant Hassi R’Mel field had been in long-term decline but this new venture is aimed at increasing gas volumes.

The project will also increase and stabilize feed-gas supplies to the Mediterranean Coast from the Hassi R'Mel hub to the port of Arzew where one of the nation’s two LNG exports plants is located. in Algeria.

System support

Baker Hughes is part of a consortium with Italian engineering company Maire Tecnimont that will supply Sonatrach with 20 compression trains to enhance the resilience of Algeria’s energy system.

“The agreement strengthens Italy-Algeria bilateral relations as Baker Hughes and Tecnimont will leverage their Italian industrial expertise to deliver on the project,” said a statement.

The contract is part of a broader order awarded to the consortium.

The signing ceremony for the contract took place in Algiers in the presence of the three company Chief Executives Rachid Hachichi of Sonatrach, Lorenzo Simonelli of Baker Hughes and Alessandro Bernini of the Maire Tecnimont group as well as Mohamed Arkab, Algeria’s Minister of Energy and Mines.

The part of Baker Hughes award comprises the supply of the 20 compression trains based on the US company’s Frame 5 gas turbine and BCL compressor technology, which will be installed across three gas boosting stations within the Hassi R’ Mel gas field.

The field is located 550 kilometres south of Algiers and is the largest gas field in Algeria and will a key source of energy supply for Algeria and the EU.

Key project

Baker Hughes CEO Simonelli said the agreement is part of an historic collaboration with Sonatrach for key energy projects.

“We have long believed that it is critical to increase gas within the overall global energy mix,” added Simonelli.

“This project helps to solve for energy producers the multi-faceted challenge of driving sustainable energy development as energy demand increases,” the CEO explained.

“ We are proud to support such a critical energy project in partnership with Tecnimont,” Simonelli stated.

Algeria became the second-largest gas supplier to Europe in 2023, further strengthening the country’s role in enhancing the energy security of the continent, particularly in Italy where Algeria represents the biggest single source of import.

The Hassi R’ Mel project is part of a broader strategic collaboration between Algeria and Italy, which includes recently signed agreements to foster bilateral cooperation and for Italy to provide financial support for Algeria’s gas production.

April 18 (LNGJ) - The UK is scheduled to receive two LNG cargoes in the next week, one from Algeria at the Isle of Grain terminal on the Medway River in Kent and a second from the US at the South Hook terminal at the Port of Milford Haven.

   The carrier “Ougarta” with 171,800 cubic metres capacity is scheduled to discharge a shipment on April 19 at the Isle of Grain facility, according to shipping data. The cargo was lifted from Algeria’s Arzew plant on April 15. The UK’s second cargo will be delivered on April 23 by the “GasLog Westminster”, which has 180,000 cubic metre of capacity, from the Sabine Pass plant in Louisiana. That shipment was loaded on April 11 at the Sabine facility owned by Cheniere Energy.

Sonatrach, the Algerian state energy company and LNG producer, has signed an accord with French major TotalEnergies to expand cooperation in the exploration and production of natural gas and in the LNG business.

The Sonatrach-TotalEnergies memorandum of understanding outlines the realisation of a work programme for the appraisal and development of natural gas resources in the Northeast Timimoun region.

The accord includes synergies with existing processing facilities for production from the Timimoun field to reduce costs and emissions.

Sonatrach and TotalEnergies plan to “consolidate their partnership and expand their cooperation” in their gas resources and LNG business.

Sonatrach added that the accord “defines the framework of cooperation between the parties” with the objective of concluding a hydrocarbon contract in the identified area of ​​interest.

Interests

TotalEnergies is active in oil and gas exploration and production through its interests in the Tin Fouyé Tabankort (TFT) and Timimoun gas fields, the Berkine Basin oil fields (Blocks 404a and 208) and via LNG supply contracts with Sonatrach.

“Sonatrach and TotalEnergies operate, within the framework of association contracts, the contractual areas of TFT II, ​​TFT Sud, Timimoun and Berkine,” the statement noted.

These are among the largest gas fields Algeria and located in the prolific Illizi-Ghadames Basin.

Total and Sonatrach are also advancing with their petrochemical project development for Western Algeria.

“This memorandum of understanding reflects our shared willingness to expand our strategic partnership with Sonatrach,” explained Julien Pouget, Senior Vice President Middle East and North Africa, Exploration and Production at TotalEnergies.

Sonatrach and TotalEnergies earlier in 2023 extended their cooperation in the LNG sector with a new contract.

In 2025, Sonatrach will thus be delivering 2 million tonnes per annum of LNG to TotalEnergies at the LNG importer terminal at Fos-Cavaou, west of Marseille.

Energy security

“This will contribute directly to the security of energy supply in France and Europe,” the statement added.

Algerian LNG exports have been recovering from a low ebb and increased by almost 9 percent to 13.45 million tonnes in 2023 from 12.40MT in the previous year from the Arzew and Skikda liquefaction plants on the Mediterranean Coast.

Algeria is also a main pipeline natural gas supplier to Europe via Trans-Mediterranean pipelines supplying Italy as well as Spain and Portugal.

Italian energy major Eni has delivered the first commercial liquefied natural gas shipment to the nation’s fourth import terminal at the Tuscan port of Piombino.

Sonelgaz, the national electricity and natural gas company of Algeria, has been put in charge by Minister of Energy and Mines Mohamed Arkab of helping to manage “a gradual and responsible” energy transition backed by gas while noting Sonelgaz has run renewable integrated energy projects since the 1980s.

During a speech at Algeria’s 27th Energy Day held on March 4 with an event at the National Polytechnic School of Algiers, the Minister outlined the North African nation’s approach to complement its domestic energy needs while exporting more LNG and pipeline gas to Europe.

“Algeria's energy policy aims to move forward resolutely towards the realization of a progressive and responsible energy transition,” said Arkab.

“This requires the adoption of a diversified energy mix taking into consideration all the energies available, the least expensive and the cleanest while benefiting from the achievements of improving energy capacity and working to control energy consumption and to preserve natural resources for future generations,” explained Arkab.

In this regard, Arkab recalled that Algeria has worked since the 1980s, through Sonelgaz, to integrate renewable energies, by supplying 20 villages with solar energy in the South of the country with the creation of solar power stations with a total power of 344 megawatts (MW) and the launch of hybrid projects with capacity of 50 MW.

Various roles

As part of the development of the use of electric vehicles in Algeria, the Minister said that Sonelgaz would carry out experimental projects with a view to setting up 1,000 charging stations for electric vehicles.

Arkab added that natural gas flaring in Algeria was targeted to reach zero and that was the responsibility of oil and gas company Sonatrach.

The Minister also explained that similarly, Sonatrach was working with the Algerian Space Agency and in collaboration with the World Bank to carry out scientific and technological research with a view to measuring and definitively limiting methane gas emissions.

The Minister said that Algeria’s Energy Day was an important opportunity to debate and exchange views between experts, economic operators and sectors concerned with energy, scientific research and the environment.

This was an opportunity for energy experts to lead several conferences, and engineering students to present presentations on themes related to energy resources and the project of an efficient energy model by 2035 and 2050. .

Sonatrach spending

Sonatrach already plans to invest more than $30 billion in the exploration and production of hydrocarbons and to upgrade facilities to improve its position in global markets for LNG as well as pipeline gas for Europe.

As part of Sonatrach's five-year investment plan (2023-2027) the sum of $40Bln has been set aside and more than $30Bln will be allocated to exploration and production with the objective of increasing production in the short and medium term.

Nearly $1Bln will be devoted to Sonatrach’s projects aimed at the company's contribution to the energy transition. These include flared gas recovery projects at production sites and the LNG plants at Skikda and Arzew.

Sonatrach signed a contract in 2022 with two Chinese engineering companies, Sinopec Luoyang Engineering and Sinopec International Petroleum Services Corp., for improvement work at the Skikda LNG plant.

The contracts include the dismantling of two 20-year-old storage tanks and the construction of a new tank of 150,000 cubic metres capacity and the modernization of the jetty and loading facilities to accommodate larger vessels.

Italian Prime Minister Giorgia Meloni, who has visited Algeria on her first foreign trip since taking office, signed four accords with the North African nation, including one on a new natural gas pipeline between Algeria and Italy.

The Government of Algerian said it intended to increase its natural gas supplies to Italy to reach a total of around 27 billion cubic metres by the end of 2022.

Algeria, the largest supplier of LNG and pipeline natural gas to the neighbouring countries of the Mediterranean Basin, said it would remain a reliable supplier of gas and oil as Algerian President Abdemadjid Tebboune made a state visit to Turkey and Minister of Energy and Mines Mohamed Arkab spoke at a Southern Europe energy conference at Sorrento in Italy.

Sonatrach, the Algerian state energy company and LNG producer, has reported a “significant” oil and associated natural gas discovery with Italy’s Eni in the Zemlet el Arbi concession of the Berkine North Basin in the Algerian desert.

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.

More E&P

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.