On May 23, Sonatrach signed an agreement with ExxonMobil for oil exploration, followed by an agreement with Chevron for the development of the Ahnat fields in the wilaya of Illizi and Berkine in the wilaya of Ouargla. These agreements mark the entry of ExxonMobil and Chevron into the Algerian market.
After the Russian invasion of Ukraine, Algerian gas became an increasingly important source of energy for the Old Continent, with a notable increase in exports.
American energy giants are turning to Algeria, Italy’s main gas supplier. Large companies in the hydrocarbon sector have recently begun massive investments in oil and gas exploration in Algeria, to double the country’s gas production and reach 200 billion cubic meters in the medium term: this would further strengthen Algeria’s role as a key supplier to Europe.
After the Russian invasion of Ukraine, Algerian gas became an increasingly important source of energy for the Old Continent, with a notable increase in exports. For the second time in less than a month, the Algerian national oil company Sonatrach has sold extraction rights to an American company. On May 23, Sonatrach signed an agreement with ExxonMobil for oil exploration, followed by an agreement with Chevron for the development of the Ahnat fields in the wilaya of Illizi and Berkine in the wilaya of Ouargla. These agreements mark the entry of ExxonMobil and Chevron into the Algerian market.
Sonatrach Executive Director Rachid Hachichi said these collaborations open new perspectives for the Algerian energy sector, demonstrating a common desire to responsibly and sustainably manage the natural resources of the African country, a member of the OPEC+ oil cartel. Energy and Mines Minister Mohamed Arkab recently said Algeria aims to produce 200 billion cubic meters of natural gas for export, with daily crude oil production reaching one million barrels.
In May 2023, Sonatrach announced a $2.3 billion agreement with the American company Baker Hughes and the Italian Tecnimon for the development of the country’s largest natural gas field, Hassi R’Mel. The project involves the construction of three compression plants and the adaptation of the existing gas gathering network, with completion expected within 39 months. In July 2022, Sonatrach signed a $4 billion contract with the American company Occidental Petroleum, in partnership with Eni and Total Energies, for the development of the Berkine (Ouargla) contract zone.
To strengthen Algeria’s role as a reliable supplier in the global gas market, Sonatrach has signed several other strategic agreements in 2023 and early 2024. These include a deal with the British company Grain LNG to expand its capacities for long-term storage and delivery of liquefied natural gas (LNG) to the company’s terminal, starting in January 2029, with a capacity of 125 gigawatt-hours per day, equivalent to 3 million tonnes per year of LNG.
Two strategic agreements were signed with the Italian group Eni for the increase in gas supplies, for the energy transition and decarbonization. Various projects are also under discussion with Italy, such as the expansion of gas transport capacity, the laying of a new gas pipeline for the transport of natural gas and, alternatively, hydrogen and blue ammonia and green, as well as the laying of an underwater electrical cable and the expansion of existing natural gas liquefaction capacity. Another medium-term gas supply contract was signed with the German company Vng Handel & Vertrieb GmbH, based in Leipzig. All these agreements show that Algeria is trying to strengthen its strategic position on the global energy scene, attracting international investments and increasing its production capacity.
In 2023, Algeria’s natural gas production reached 136 billion cubic meters, compared to 132.7 billion cubic meters in 2022, of which more than 52 billion cubic meters were intended for export. The production of liquefied natural gas was 22.5 billion cubic meters, delivered to the Arzew and Skikda complexes, with an output of 13 million tonnes of LNG. Additionally, the production of liquefied petroleum gas (LPG) was 9.4 million tonnes and that of condensate was 8.3 million tonnes.
Algeria has three oil ports (Arzew, Bejaia, and Skikda) with a transport capacity of 1.3 million tonnes and four gas liquefaction complexes (three in Arzew and one in Skikda) with a total capacity of 55 million cubic meters per year. The distribution network includes a 21,190-kilometer-long pipeline system, with 43 pipelines equipped with 85 pumping and compression stations, capable of transporting 406 million tonnes of oil equivalent per year, including 140 billion cubic meters of natural gas. In addition, Algeria has a fleet of 17 ships, including LNG carriers, LPG ships and oil tankers, and two intercontinental gas pipelines: the Trans-Mediterranean gas pipeline (TransMed) “Enrico Mattei”, which connects Algeria to Italy via Tunisia, and the Medgaz, which connects Beni Saf to Almeria, Spain.
