Algeria Wins Gas Contracts Despite The Crises Of Covid19, The Oil Prices’ Collapse

Algeria won, through the Sonatrach company, the bet of renewing the medium and long gas contracts for all the partners in the most difficult two years that the country went through since twenty years, the first year was the popular movement (Hirak) which disturbed political scene, and the second year due to Covid19 pandemic and the historical collapse of oil prices, factors that are considered a victory for the Algerian negotiator given the difficult circumstance in which the agreements were renewed.

In the context, the National Hydrocarbons Company renewed, since two days ago, a contract to supply the liquefied natural gas for the benefit of the French company “Total” for another three years, as it will supply it with quantities that exceed 2 million tons annually.

It is known that the liquefied natural gas is exported via gas tankers across the sea from gas liquefaction plants, and has nothing to do with natural gas that is exported via pipelines through Italy and Spain.

More than a week ago, Sonatrach renewed a contract to supply natural gas to Tunisia, which runs until 2027, with quantities increasing, according to the new contract, by 20% as of 2025, the company said in a statement.

Regarding the renewal of these two contracts by Sonatrach with both the French Total and the Tunisian state electricity and gas company, the operation took place at the height of the Covid19 pandemic and the historical decline in oil prices, and the economic crisis that accompanied that.

Before that, Algeria won another bet regarding gas contracts with the most important partners, especially the Europeans, as most of them were renewed in 2019, the year marked by the popular movement and the vague political and economic landscape, and the fear that is expressed by many European partners about the situation in Algeria during the past year.

Sonatrach renewed the gas supply contract for the Spanish company “Naturgy” (formerly Natural Gas Fenosa) from 2019, for 10 years, with quantities estimated at 8 billion cubic meters annually.

Sonatrach also managed to renew gas supply contracts to Italy, which is one of the most important customers of Algerian gas, as it renewed the contract with each of “Eni” for 10 years in quantities of 10 billion cubic meters annually, and “Enel” for 8 years in quantities up 3 billion cubic meters every year, then the Italian company “Edison”, which will be supplied by Sonatrach with Algerian gas for eight years starting from 2020, with quantities estimated at one billion cubic meters every year.

The renewal of contracts also reached the Portuguese partner “Galp”, which will be supplied with gas by Sonatrach for 8 years, with annual quantities estimated at 3 billion cubic meters, according to the new contract.

Sonatrach renewed the contract for the supply of natural gas and liquefied natural gas in favour of the French “Engie” in November 2019, where the contract related to the liquefied natural gas extends for 4 years, renewable with annual quantities estimated at 1.7 billion cubic meters annually, while natural gas will be through pipelines either from Italy or Spain, for 3 years, in quantities estimated at 500 million cubic meters every year.

In 2018, Sonatrach renewed contracts to supply liquefied natural gas to Turkey, through its partner Botaş until 2024, with annual quantities estimated at 5.4 billion cubic meters.