France’s energy giant TotalEnergies and Algeria’s state-owned Sonatrach have inked a series of new deals to bolster their cooperation in more than one energy-related area, including the production of natural gas and the delivery of liquefied natural gas (LNG) to Europe. The duo also extended this cooperation further by throwing the development of renewables into the mix in Algeria.
During a meeting held in Algiers between Patrick Pouyanné , Chairman and CEO of TotalEnergies, and Toufik Hakkar , Chief Executive Officer of Sonatrach, three agreements were signed to strengthen the cooperation between the two players.
“I am delighted to sign these new agreements with our strategic partner Sonatrach. They testify to TotalEnergies’ close ties to Algeria, whose resources contribute directly to Europe’s energy supply and security. We are also happy to support Algeria in the energy transition, by examining and developing its huge potential for renewables production,” highlighted Pouyanné.
Under the first agreement, which remains subject to the approval of the Algerian authorities, Sonatrach and TotalEnergies have agreed to convert the production contracts for the Tin Fouyé Tabankort II (TFTII) and Tin Fouyé Tabankort Sud (TFT sud) fields in southern Algeria to the framework established by the new Algerian Petroleum Law enacted on 11 December 2019.
As a result, the duo will pursue the investment programme already launched to increase the gas production of TFTII and TFT South, which includes the upgrade of existing facilities and the drilling of additional wells.
The combined production of the two fields is expected to exceed 100,000 boe per day by 2026, versus a level of around 60,000 boe per day in 2022. This increases the potential export of Algerian gas to the European market. While Sonatrach has a 51 per cent interest in this asset, TotalEnergies holds the remaining 49 per cent stake.
Furthermore, the second agreement enables the two companies to extend for the year 2024 deliveries of 2 million tons per year of LNG to TotalEnergies at the port of Fos-Cavaou, near Marseille, France. These deliveries of Algerian natural gas by sea contribute directly to energy security in France and Europe.
On the other hand, the third deal, which will allow TotalEnergies and Sonatrach to examine the development of projects to produce renewable energy in Algeria, encompasses renewables projects to solarize exploration and production sites for oil and gas, and to power seawater desalination plants; a project to produce renewable, low-carbon hydrogen for the export market; and an R&D programme in low-carbon energies and the energy transition.
In a bid to curb emissions, Sonatrach also joined forces with Eni in January 2023, thus, the duo’s mission is to identify opportunities for emissions reduction and define energy efficiency initiatives, renewable energy developments, green hydrogen projects, and carbon capture and storage (CCS) projects.
Meanwhile, TotalEnergies and SOCAR have now put into production mode a gas and condensate field in the Caspian Sea offshore Azerbaijan.
This has been linked to SOCAR’s existing facilities in Oil Rocks.