Algeria Is Renewing Major Contracts With Foreign Partners For Gas Exports

Algeria and Sonatrach have been able to renew three major gas contracts with foreign partners at the height of the popular protest movement, despite the foggy political and economic landscape in the country since last February, and many foreign partners are concerned about this new-fangled situation.
Sonatrach has signed contracts for the export of nearly 16 billion Cubic meters of gas towards Italy and Portugal in a period marked by continuous popular protest marches and the cancellation of presidential elections twice in the country.
On the date of May 16, the Italian company Eni, the historic partner of Algeria and Sonatrach, agreed to the renewal of contracts for the supply of Algerian gas to Italy for ten years from 2020 onwards, and in quantities set at about 10 billion cubic meters annually (between 9 and 10 billion).
This is in fact a smaller amount than previously, given the decline in the growth of the Italian economy and the reduced demand for gas in the industrial sector in particular.
The signing ceremony was preceded by a visit by Eni’s CEO, Claudio Descalesi, to Algeria on April 23, which resulted in the signing of a Memorandum of Understanding (MoU) to prepare for the renewal of gas export contracts with Italy.
After the agreement with the Italian “Eni”, the turn came for the Portuguese party through the signing between the Portuguese energy company “Ghalib” and the Algerian energy group Sonatrach last June 11th, on the renewal of the contract for the export of gas to this European country for another ten years from 2020 onwards, for quantities up to 2.5 billion cubic meters per year, knowing that the partnership between the two sides started in 1994.
The Italian company Eni, which will be supplied by Sonatrach with 3 billion cubic meters per year, will take 8 years as from January 1, 2020 and can be extended for an additional two years.
What accompanies Algeria in renewing the major contracts for the export of gas, according to observers, is that it has always fulfilled its obligations towards foreign partners and in the darkest conditions during the difficult years (notably during the black decade of the 90’s), which led the foreign partners to update contracts for the import of Algerian gas, despite everything that has been said about the murky national political and economic scene and the cancellation twice of the presidential polls in light of the widespread popular protest movement which has been going on since 22 February 2019.
It is not unlikely that the renewal of these contracts will be viewed as a positive signal by the other foreign partners by likewise prompting them to renew their energy-related contracts with Algeria’s Sonatrach group.