Sonatrach issued the following announcement on Sept. 21.
The National Hydrocarbons Company (Sonatrach) will soon announce the renewal of its long-term gas contracts with certain countries, having renewed, in 2018, the contracts with four European countries, said its CEO, Rachid Hachichi.
“Since last year, Sonatrach has renewed its gas contracts with Naturgy (Spain), Galp (Portugal), Botas (Tukey) and Eni and Enel (Italy). Other announcements will be made public in the coming months, “Hachichi said in an interview with the energy analysis magazine, Petroleum Economist.
Asked about a possible impact of the pricing method applied in these contracts on the flexibility of the country vis-à-vis its customers, Mr. Hachichi stressed that Algeria was proposing a “balanced” set of services and that the pricing was not as one of many.
“As you know, a gas contract is not just about price. It’s a set of parameters, such as long-term security of supply, seasonal flexibility, short-term flexibility and the level of payment that all our customers appreciate, “he said.
Prices on trading platforms (Hub pricing) “do not offer this set of services,” he argued.
“We therefore believe that Sonatrach continues to offer a balanced mix of services in its long-term gas contracts, pricing being just one element,” Hachichi added.
Support LNG production
Asked about the prospects for increasing Algerian LNG exports in the coming years, he recalled that Sonatrach’s place in the LNG market “gives it a competitive advantage in terms of flexibility its natural market, namely Europe, and allows it to develop its gas in distant markets offering arbitrage opportunities “.
Current LNG production capacity, totaling nearly 100 billion cubic meters, “can support our production volumes while offering us a valuable tool to secure our deliveries and make our gas more profitable,” he said.
Asked how Sonatrach would balance the growing domestic demand for energy while maintaining or increasing its export volumes, the company’s lead manager said several steps are being taken to achieve this dual purpose.
To boost its gas exports, Algeria is counting on the development of energy trade, increasing the capacity of the export infrastructure, such as the Medgaz gas pipeline to Spain, and building a new LNG jetty at Skikda.
To meet growing national demand, the country is focusing on increasing the number of fields and optimizing the use of existing fields, he said.
The increase in new discoveries on the ground, says Hachichi, is part of improving the performance of the exploration strategy and is expected to increase the number and volume of discoveries.
A better mobilization of reserves and improved performance in terms of drilling, wells and volumes are, he continues, the other actions undertaken by Algeria to meet internal energy consumption (APS).
Original source: https://sonatrach.com/actualites/sonatrach-des-contrats-gaziers-a-long-termes-prochainement-renouveles
