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    Sonatrach, Eni Sign Agreement

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Summary

Sonatrach and Eni last week agreed to strengthen their upstream and gas supply arrangements, but the latest accord's main thrust appears to be renewable energy.

by: Mark Smedley

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Natural Gas & LNG News, Africa, Europe, Renewables, Gas to Power, Corporate, Exploration & Production, Import/Export, Political, News By Country, Algeria, Italy,

Sonatrach, Eni Sign Agreement

Algerian state producer Sonatrach's CEO Amine Mazouzi and his Eni counterpart Claudio Descalzi reached “an agreement that strengthens the long-term cooperation between the two companies in the upstream sector and on gas supply contracts, as well as extending the partnership to new segments of the energy sector,” said Eni on November 25. 

Eni said the two CEOs also defined the terms for cooperation on promotion and development of renewable energy, following up on commitments expressed in their meeting on September 22.

Eni CEO Claudio Descalzi (left) and Sonatrach CEO Amine Mazouzi sign a new agreement, November 2016 (Photo credit: Sonatrach)

Descalzi said, thanks to these agreements, Eni is the first international oil company in Algeria not only willing to consolidate its presence in the oil and gas sector but also to transfer renewable energy and technology there.

In view of the reference to gas supply contracts, and Eni’s statement that it imported roughly 9.7bn m3 from Algeria “this year”, NGW asked if one of the agreements reached was to reduce Eni’s historic level of contractual imports from their roughly 20-22bn m3/yr. There was no clear response. An Eni spokesman replied November 25 that the latest agreement “is mainly about renewables… I'm afraid I can't provide you with the info on gas.”

Since their peak in 2012, Italian importers of Algerian gas reduced annual imports by about half, by mutual agreement with Sonatrach. However, in 2016 Italian imports gradually trended upwards, though have not as yet recovered to their original full contractual volumes.

Sonatrach’s announcement about its latest agreement with Eni, published on its website November 26 and entitled 'a reaffirmed commitment', echoes Eni's text although does not mention the 9.7bn m3 figure, perhaps suggesting that no radical changes were made to gas contractual terms.

Present in Algeria since 1981, Eni says it now participates in 32 mining permits, invested $11.5bn between 2010 and 2015 upstream, and has equity production exceeding 100,000 barrels of oil equivalent per day.

 

Mark Smedley