Sonatrach Secures 10-Year LNG Supply Agreement with Grain LNG to Bolster UK’s Energy Security

BY: Dr. Hana Saada

ALGIERS- Algeria’s state-owned hydrocarbon company, Sonatrach, has inked a significant ten-year agreement with Grain LNG to enhance the supply of liquefied natural gas (LNG) to the United Kingdom.

As per Sonatrach’s statement, this accord entails an extension of storage and long-term delivery capacities for Algerian LNG at the terminal operated by the British company, effective from January 2029.

The agreement outlines an import capacity of 125 GWh/day, equivalent to 3 million tons of LNG annually, marking the first outcome of the competitive bidding process initiated by Grain LNG in September 2023. Sonatrach emphasizes that the success of this bidding process ensures the future of Europe’s largest LNG import terminal for the next decade.

Situated on the Isle of Grain, east of London, the Grain LNG terminal is currently undergoing expansion to store and deliver the necessary gas quantities, catering to up to 33% of the UK’s gas demand.

Sonatrach highlights that this infrastructure has recently experienced a significant rise in LNG imports, contributing to Europe’s efforts to diversify its gas supply sources.

“This agreement marks another major step in ensuring the energy security of the United Kingdom,” stated Katie Jackson, President of National Grid Ventures, according to the press release.

Jackson emphasized the essential role of LNG imports in providing the UK with flexible and reliable gas supplies for heating homes and supporting the growth of renewable energy production. She added that the agreement ensures the Grain terminal continues to have a diversified supplier base in the Atlantic Basin.

Mayouf Belgacem, Sonatrach’s Vice President of Commercialization, expressed the company’s commitment to strengthening its long-term partnership with Grain LNG. He highlighted the pivotal role of LNG in preserving economic activities and energy supply security globally.

“In concluding this agreement, we express our intention to reinforce our position as a long-term partner of Grain LNG and a substantial contributor to the UK’s gas supply security,” Belgacem affirmed. “Moreover, this agreement provides Sonatrach with assured access to the largest LNG import terminal in Europe, contributing to strengthening its long-term marketing strategy in diversifying LNG markets,” he added.

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