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TotalEnergies signs Algeria gas deal

10 July 2023

The French oil and gas firm TotalEnergies has signed a series of agreements with Algeria’s national oil and gas company to increase Algerian gas production and the number of gas deliveries to France.

The agreements were signed by the chairman and chief executive of TotalEnergies, Patrick Pouyanne, and the chief executive of Algeria’s Sonatrach, Toufik Hakkar.

Under the terms of one of the agreements, both parties agreed to convert the production contracts for the Tin Fouye Tabankort II (TFTII) and Tin Fouye Tabankort Sud (TFT Sud) fields in southern Algeria to the framework established by the Algerian Petroleum Law enacted on 11 December 2019.

Sonatrach has a 51 per cent stake in the fields and TotalEnergies has a 49 per cent stake.

The Algerian petroleum law enacted in 2019 created a more structured petroleum framework and a more favourable tax regime for investors.

As a result of the new agreement, which remains subject to the approval of the Algerian authorities, the two companies are planning to increase production at the two fields.

This will include upgrading existing facilities and drilling additional wells, according to a statement published by TotalEnergies.

The combined production of the two fields is expected to exceed 100,000 barrels of oil equivalent a day (boe/d) by 2026, versus a level of around 60,000 boe/d in 2022.

In its statement, TotalEnergies said this would increase “the potential export of Algerian gas to the European market”.

Under the terms of another agreement, Sonatrach and TotalEnergies agreed that the state-owned Algerian company would deliver two million tonnes of liquefied natural gas (LNG) to the French port of Fos-Cavaou, located near Marseille.

In its statement, TotalEnergies said: “These deliveries of Algerian liquefied natural gas contribute directly to energy security in France and Europe.”

Under a third agreement, TotalEnergies and Sonatrach agreed to cooperate in developing renewable energy projects in Algeria.

These included:

  • Renewable projects to use solar power at oil and gas exploration and production sites
  • A study of the potential for renewable, low-carbon hydrogen for the export market
  • A research and development programme focused on low-carbon energy and the energy transition

Patrick Pouyanne said: “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 delighted to be able to support Algeria in its energy transition and in the development of its huge potential for renewable energy production.”

TotalEnergies is active in oil and gas exploration and production through its interests in the Tin Fouye Tabankort and Timimoun gas fields, the Berkine Basin oil fields (blocks 404a and 208) and liquefied natural gas via supply contracts with Sonatrach.

In 2022, the company produced 62,000 boe/d in Algeria through its interests in the TFT II and Timimoun gas fields and the Berkine Basin oil fields.

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Wil Crisp

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