Sonatrach Boosted Gas Exports to Italy

Sonatrach Boosted Gas Exports to Italy

Algerian Sonatrach boosted natural gas sales to Italy by 140% in the first ten months of the year as Algeria looks to bolster energy exports after years of stagnation, with exports expecting to grow further with a new supply deal, Engineering News reported.

The agreement will provide Italy with 10bcm/y of natural gas each, covering about 16% of the southern European country’s demand through the Transmed pipeline, according to Forbes. The agreement also moves to strengthen ties between Algeria’s state-backed Sonatrach and Italy’s Eni, which is currently active in the North African state.

Sonatrach’s Marketing Deputy General Manager, Omar Maaliou, and VP of Exploration and Production, Salah Mekmouche, cited the effective exploitation of existing fields and expanded pipeline capacity as the reasons behind the boost in sales. Accordingly, Algeria’s gas exports between January and October rose 25% from 2015, with exports for the year expected to rise to 54bcm from 44bcm in 2015. OPEC member Algeria is a leading exporter of gas to southern Europe, and is looking to bolster its standing in the international gas market.

Over the last several years, Algeria has struggled to sustain and increase oil and gas production amid an ongoing corruption investigation, management shake-ups at the state-backed Sonatrach, collapsing global pricing and fading confidence among vital foreign production partners. The country has moved to introduce legislation to help ease the process of investment and production among foreign energy partners, but with prices low, these efforts have been far from successful.

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