LNG

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.

France is moving ahead with its fifth LNG import terminal with a floating storage and regasification unit (FSRU) being deployed at the port of Le Havre on the northeast coast of Normandy where there had previously been an onshore facility that handled deliveries of LNG from Algeria for Gaz de France.

Cheniere Energy, the largest US LNG exporter from its Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, has agreed to extend an LNG sales accord  with the French utility Engie.

Cheniere said it has agreed with Engie, based in Paris, to amend the LNG sale and purchase agreement (SPA) the parties previously entered into in June 2021.

The Houston, Texas-based company said that under the revised SPA, Engie had agreed to purchase approximately 900,000 tonnes per annum of LNG from Corpus Christi on a free-on-board basis for 20 years and whereby the French provide their own ships.

The FOB contract began in September 2021. Cheniere said the purchase price for LNG under the SPA is indexed to the Henry Hub price, plus a fixed liquefaction fee.

Engie had previously agreed in June 2021 to purchase between 400,000 tonnes per annum and 1.1 million tonnes per annum of LNG for 11 years.

“We are pleased to build upon the long-term agreement we signed in 2021 with Engie, one of Europe’s energy leaders in low-carbon solutions, to increase the volume and extend the term beyond 2040,” said Jack Fusco, Cheniere’s President and Chief Executive .

“This SPA reflects the importance of a diverse and reliable long-term supply of natural gas for Europe and reinforces the value the LNG market places in Cheniere’s commitment to climate and sustainability initiatives,” added Fusco.

Flexible

“We look forward to continuing to supply Engie with flexible, cleaner burning LNG as part of our shared vision of a lower carbon future,” stated the CEO.

Cheniere is now moving forward with the lump sum, turnkey, engineering, procurement and construction contract with US LNG and energy engineering firm Bechtel Inc. for the Corpus Christi LNG plant expansion.

Cheniere has asked Bechtel to commence early engineering, procurement and other site work for the Corpus Christi expansion, known by Cheniere as the Stage III Project.

Corpus Christi Stage III is a fully permitted project consisting of up to seven mid-scale Trains, each with an expected liquefaction capacity of about 1.49 MTPA with a total production capacity of more than 10 MTPA.

Cheniere said that it was pleased to once again partner with Bechtel following the engineering firm’s “unmatched track record for execution excellence” while successfully building Cheniere’s LNG platform.

Cheniere in February 2022 announced the completion of Train 6 at Sabine Pass plant Cameron Parish in Louisiana, formally taking nameplate capacity to 27 MTPA. 

US liquefied natural gas LNG shipments increased in the past week even as LNG cargo prices remained at historically low levels in Asia while European prices were still much lower than the US spot Henry Hub benchmark.