The Algerian state company Sonatrach SPA and TotalEnergies SE have signed three agreements on gas supply and development of gas and renewables.
In one of three deals with Algeria that the French world energy major announced this week, a Sonatrach LNG contract has been extended, guaranteeing a supply to Europe of two million metric tons per year until 2024. to be delivered to the French port of Fos-Cavaou, Algeria’s LNG will “contribute directly to energy security in France and Europe,” TotalEnergies said in a press release.
The French major in world energy had already extended its subscription to Algerian LNG for another three years. This previous extension included Sonatrach’s sub-charter of an LNG tanker from TotalEnergies, as announced by the latter on 25 June 2020.
TotalEnergies and Sonatrach have also agreed to increase gas production at the Tin Fouye Tabankort II and Tin Fouye Tabankort Sud fields in the south of the North African country. The projects include drilling more wells and upgrading existing facilities. “Combined production from the two fields is expected to exceed 100,000 boe [barrels of oil equivalent] per day in 2026, against a level of around 60,000 boe per day in 2022, thus increasing the export potential of Algerian gas to the European market,” said TotalEnergies.
In the third pact, both will cooperate in “renewable projects to solarize oil and gas exploration and production sites; a study of the potential of renewable and low-carbon hydrogen for the export market; an R&D [research and development] program in low carbon energies and energy transition”.
The partnerships “testify to TotalEnergies’ close ties with Algeria, whose resources contribute directly to Europe’s energy supply and security,” President and CEO Patrick Pouyanne said in the media release. “We are also delighted to be able to support Algeria in its energy transition and in the development of its enormous potential for renewable energy production.”
TotalEnergies previously said it has been tapping its diverse LNG portfolio to help bridge the supply gap in Europe caused by Russian energy embargoes in response to its February 2022 invasion of Ukraine.
“Europe is facing a historic gas supply crisis caused by the sharp drop in Russian flows. Since the beginning of this crisis, TotalEnergies has mobilized its large and flexible LNG portfolio to send available LNG in Europe and use its 18 Mt/year. [metric tons per year] regasification capacity,” said Stephane Michel, president of gas, renewables and electricity at TotalEnergies, in a January 13 statement announcing the commissioning of an LNG terminal on the German side of the Baltic Sea.
“Thanks to the launch of the Lubmin terminal, TotalEnergies will be able to join this effort and increase its imports to Europe to more than 20 Mt/year, or around 15 percent of the continent’s regasification capacity “.
In another relevant development, TotalEnergies also simultaneously announced this week the start-up of production from the Absheron gas and condensate field in the Caspian Sea, a joint development with the State Oil Company of the Republic of Azerbaijan. Azerbaijan earlier this year signed an agreement with four European Union countries to increase gas supplies from the Eurasian producer to the continent.
The first phase of the Absheron project has a capacity of 141.26 million cubic feet of gas per day and 12,000 barrels of condensate per day.
“The development of the Absheron field provides an additional supply of gas to meet growing demand, at a competitive technical cost and low greenhouse gas emission intensity, in line with TotalEnergies’ strategy,” he said. TotalEnergies said in a separate statement.
In April, Azerbaijan agreed to increase gas deliveries to Europe via Bulgaria, Hungary, Romania and Slovakia.
“In 2021, we delivered 8 billion cubic meters to Europe. And this year, our target is 12,” Azerbaijan’s President Ilham Aliyev said at the signing ceremony of the agreement on 24 April, according to a transcript on the presidential website.
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