- Sonatrach has agreed to extend LNG deliveries to the French energy major at the Fos-Cavaou port until 2024.
- Sonatrach and TotalEnergies will pursue the investment programme already launched to increase gas production at the fields, including upgrading existing facilities and drilling additional wells.
Algeria’s state-owned company Sonatrach has signed natural gas contracts with French energy significant TotalEnergies. The agreements include hydrocarbon contracts concerning the exploitation of Tin Fouye-Tabankort (TFT) II and TFT South fields in south-east Algeria and liquefied natural gas and renewable energy contracts, TotalEnergies said on Monday.
Sonatrach and TotalEnergies will pursue the investment programme already launched to increase gas production at the fields, including upgrading existing facilities and drilling additional wells. The combined production of the two fields is expected to exceed 100,000 barrels of oil equivalent per day by 2026, up from about 60,000 boed last year.
The new agreements “testify to TotalEnergies’ close ties to Algeria, whose resources contribute directly to Europe’s energy supply and security”, said Patrick Pouyanne, chairman and chief executive of TotalEnergies. “We are also happy to support Algeria in the energy transition by examining and developing its huge potential for renewables production.”
Additionally, Sonatrach has consented to keep delivering 2 million tonnes of LNG annually to TotalEnergies at the Fos-Cavaou port near Marseille through the year 2024. The businesses have agreed to work separately to investigate the potential for renewable energy projects in North Africa. A few of the initiatives may be “solarising” oil and gas sites, using renewable energy to run desalination plants, exporting low-carbon hydrogen, and exploring and developing low-carbon energy sources.
According to the World Bank, oil and gas accounted for 19% of Algeria’s gross domestic product, 93% of its product exports, and 38% of its budgetary revenue between 2016 and 2021. Algeria is a member of Opec. The largest gas exporter in Africa, Algeria contributes around 11% of the natural gas used in Europe, which has increased imports of LNG from other markets to take the place of Russian supply. Following Russia’s reduction in exports to the area in reaction to economic sanctions imposed as a result of Moscow’s invasion of Ukraine, the EU set gas storage goals last year.