BY: Hana Saada
Algiers, August 11, 2023– In a landmark move that promises to reshape the energy landscape, Algerian state-owned energy company Sonatrach and the French energy giant Total Energies have inked three groundbreaking contracts worth a combined $700 million. The agreements, signed on Sunday in Algiers, are poised to amplify gas and condensate production, with a forecasted leap from the current 60,000 to over 100,000 barrels of oil equivalent per day by 2026. This bold partnership seeks to leverage untapped potential in the southeast region of Algeria, delivering substantial benefits to both companies and bolstering gas supplies for Europe.
The agreements encompass two hydrocarbon contracts and a crucial extension of contractual obligations that tie the two corporations in a collaborative endeavor to produce liquefied natural gas. The contracts were formalized by the CEO of Sonatrach, Toufik Hakkar, and Total’s CEO, Patrick Pouyanné, who jointly emphasized the strategic importance of their alliance in fueling the French and European gas markets.
At the heart of this transformative partnership are the southern Algerian gas fields that will be developed in line with provisions outlined in Algeria’s hydrocarbons law of 2019. This legislation extends tax and customs incentives to foreign investors, thus fostering an attractive climate for strategic energy partnerships. The synergy between Sonatrach and Total Energies exemplifies the fruitful results such cooperation can yield.
The primary contract entails a substantial investment of $332 million and anticipates the extraction of 43 billion cubic meters of gas, 4.3 million tons of condensate, and 5.7 million tons of liquefied petroleum gas. The subsequent contract, valued at $407 million, is set to yield 11.5 billion cubic meters of gas, 1.3 million tons of condensate, and 1.6 million tons of liquefied petroleum gas. These ambitious ventures are positioned to significantly elevate the region’s gas production capacity and underscore the fruitful collaboration between Sonatrach and Total Energies.
“The strengthening of their commercial partnership allows them to play a major role in supplying the French and European market with gas,” affirmed the CEOs of both companies in a joint statement. As the energy transition accelerates, the synergy between these industry leaders becomes pivotal in meeting the growing demand for cleaner fuels across the continent.
In an energy landscape marked by dynamic shifts and ambitious decarbonization goals, the Sonatrach-Total Energies partnership stands as a testament to the proactive spirit driving innovation and growth. The agreements not only signify an unprecedented step towards achieving energy security but also solidify Algeria’s position as a key player in the global energy dialogue.
