Eni signs deal with Algeria’s Sonatrach to ramp up gas supplies

Italian energy major Eni has signed an agreement with Algerian state-owned company Sonatrach to increase gas supplies from Algeria through the Transmed pipeline, providing higher transported volumes of up to 9 billion cubic meters of gas per year by 2023-24.

The agreement, signed in Algiers on Monday between Claudio Descalzi, CEO of Eni, and Toufik Hakkar, President of Sonatrach, will allow the Italian company to increase the quantities of gas imported through the TransMed/ Enrico Mattei pipeline under the umbrella of the long term gas supply contract in place with Sonatrach starting from autumn.

Algerian President Abdelmadjid Tebboune and Italian Prime Minister Mario Draghi were both present for the signing ceremony in a reflection of the growing cooperation between the countries, Eni said in a statement. The deal was negotiated and signed in record time following intense negotiations, it noted.

“Today is a special day for the relations between Italy and Algeria, in particular for Eni and Sonatrach: thanks to the close the long-standing collaboration between the two companies, it was possible in a short time and with an enormous joint effort to sign this important agreement that further consolidates the partnership between the companies and strengthens the cooperation between our countries,” Descalzi said in a statement.

The agreement will exploit the pipeline’s available transportation capacities to ensure greater supply flexibility, gradually providing increasing volumes of gas from 2022, up to 9 billion cubic meters per year in 2023-24. Sonatrach has also set with Eni new gas sales prices for 2022 and 2023, the statement said.

The new gas volumes covered by the agreement are also the result of the close collaboration in the development of upstream gas projects, and Eni’s model has significantly accelerated the production potential of Algerian fields, the statement said.

The agreement comes at a time when Europe is looking to ramp up its gas supplies from new suppliers and secure its energy policies in the aftermath of Russia’s invasion of Ukraine.