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.

Swan Energy Ltd, part of the Indian conglomerate the Swan Group with interests in oil and gas, textiles and infrastructure has given details of its lease-out deal to Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) of a floating storage and regasification unit.

The charter for the “Vasant 1” floating storage and regasification unit (FSRU), which is controlled by Japan’s Mitsui OSK Lines, is held by Swan Energy subsidiary Triumph Offshore Private Limited (TOPL) and has now moved to Saros Bay offshore northern Turkey.

The FSRU “Vasant 1” has capacity of 180,000 cubic metres and was completed by Hyundai Heavy Industries of South Korea at the end of 2020 for Swan‘s planned LNG import terminal at Jafrabad in India’s Gujarat state.

Swan was the lead promoter of the delayed Jafrabad LNG import terminal with a 63 percent equity stake.

The other shareholders are the Government of Gujarat with a 26 percent interest and the remaining 11 percent is owned by FSRU Venture India One Ltd, the Indian subsidiary of Japanese shipping line Mitsui OSK Lines.

MOL acted as technical partner for the Jafrabad project by supervising the construction of the FSRU.

Charter rates

“The lease arrangement is generating daily rental of $250,000, or about 2 crore Indian rupees (as per the present exchange rate), for Swan Energy,” said the Indian firm of the BOTAS deal.

“The duration of the lease agreement is for 12 months and is extendable on this basis of mutual agreement,” Swan added.

Based on the bare boat charter, TOPL has leased out only the bare FSRU vessel to BOTAS and BOTAS will manage the operational expenses including fuel, crew, insurance, maintenance, and repair.

“As a result, TOPL does not incur any operational expenses during the lease tenure,” Swan said.

BOTAS also runs the Marmara Eregesli LNG import terminal and cargoes have been received there since 1994, first from Algeria and later from countries like Qatar and Nigeria and then over the last five years from the US as well.

Commenting on the lease arrangement with BOTAS, Rishi Chopra, an executive of Swan, said the lease agreement based on bare-boat charter would enhance the rental earning capabilities of the FSRU.

“The net revenue from the annual rental will strengthen the profitability position of the company,” explained Chopra.

“By renting out the FSRU to BOTAS, we aim to play an enabling role to boost the LNG initiatives of the Turkish government to build clean energy preparedness amid a growing demand for FSRUs in that market,” he added.

Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) has become the seventh company to sign a long-term supply agreement with Oman LNG in the Arabian Peninsula.

The Dutch Gate LNG import terminal in Rotterdam, a joint venture between Dutch utility Gasunie and global storage company Royal Dutch Vopak, is proceeding with its open season to gauge market interest in an additional 4 billion cubic metres per annum of capacity.

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.

TurkStream, the natural gas export pipeline from Russia to Turkey, has completed its first offshore phase across the Black Sea, while the second onshore phase will deliver gas to the Turkish market and southern and southeastern Europe in competition to LNG.