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    Sonatrach, Eni Sign Algerian Gas Accords (Update)


The two also renegotiated a long-term contract that was extended a year ago.

by: William Powell

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Sonatrach, Eni Sign Algerian Gas Accords (Update)

(Adds comment from Eni on N Berkine)

The CEOs of Sonatrach and Italian Eni, Toufik Hakkar and Claudio Descalzi, met in Algiers July 1 to discuss working on joint projects including upstream projects in Algeria and abroad, the companies said.

They signed three gas agreements relating to Sonatrach's marketing of dry gas from the Ourhoud II, Sif Fatima II and Zemlet El Arbi fields, with an annual volume nearly 1.5bn m³, until 2049.

The two companies also confirmed their willingness to continue the acceleration of the Berkine Nord project, which entered into production last February, just one year after the signing of the agreements, with the aim of exporting 6mn m³/day by the end of this year. Both CEOs committed to an accelerated time to market path by leveraging the capacity of the contracting companies of the Sonatrach group involved in the execution of the works.

In addition they amended the gas sales contract for gas year 2020-2021. Dating from 1977 and renewed in May 2019, the gas is to supply the Italian market until 2027, plus two additional optional years. No details were given but since last May the European gas market has lurched to low prices thanks to very low demand and very high supplies so perhaps Eni secured volume relief or a price reduction.

Sonatrach said the MoU will strengthen relations between the two parties in the fields of exploration and exploitation in Algeria, including solar energy projects at their joint reservoirs. And Descalzi said that despite the international economic crisis leading to a 35% cut in its investments, Eni had "decided to continue and stay with a full budget in Algeria."