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TotalEnergies signs MoU with Sonatrach for hydrocarbon development in Algeria

TotalEnergies and the Algerian national oil and gas company, Sonatrach, have entered into a memorandum of understanding (MoU) to delineate the framework for a hydrocarbon contract in the North-East Timimoun region of Algeria.

This agreement is facilitated under the provisions of Algeria’s Law n°19-13, which governs hydrocarbon activities in the country.

The MoU outlines a strategic collaboration aimed at the appraisal and development of gas resources in the specified region. It intends to leverage the existing processing facilities in the Timimoun field, optimizing resource development while aiming for cost efficiency and emission reduction. This agreement signifies a continuation of the longstanding partnership between TotalEnergies and Sonatrach, reflecting a mutual commitment to energy development that aligns with sustainable and environmental standards.

Julien Pouget, Senior Vice President Middle East & North Africa, Exploration & Production at TotalEnergies, commented on the agreement, stating, “This Memorandum of Understanding reinforces our intent to expand our strategic alliance with Sonatrach.” This statement underscores the shared objectives of both companies to foster a collaborative relationship in the energy sector, particularly in the development and optimization of hydrocarbon resources.

Earlier in the year, TotalEnergies and Sonatrach extended their partnership within the liquefied natural gas (LNG) sector until 2025. This extension involves Sonatrach supplying two million tonnes of LNG to TotalEnergies for delivery at the Fos-Cavaou terminal near Marseille in 2025. This agreement is part of broader efforts to ensure the security of energy supply in France and Europe, demonstrating the critical role of international partnerships in maintaining energy stability.

TotalEnergies’ involvement in Algeria encompasses a wide range of operations, including exploration and production activities in key oil and gas fields such as Tin Fouyé Tabankort, Timimoun, and the Berkine Basin (Blocks 404a and 208). In 2023, the company reported a production output of 51,000 barrels of oil equivalent per day from its Algerian operations, highlighting its significant contribution to the country’s energy sector.

In addition to its upstream activities, TotalEnergies also participates in the downstream sector through its subsidiaries, TotalEnergies Lubrifiants Algérie SPA and TotalEnergies Bitumes Algérie SPA, which are involved in the marketing of lubricants and bitumen, respectively.

Algeria holds significant importance to TotalEnergies for several strategic, economic, and geographical reasons:

  1. Substantial Hydrocarbon Reserves: Algeria is one of Africa’s leading oil and gas producers, with some of the world’s largest reserves of natural gas and substantial oil resources. TotalEnergies’ involvement in Algeria allows it access to these vast hydrocarbon resources, supporting the company’s production portfolio and contributing to its global supply chain.
  2. Strategic Location for Energy Exports: Algeria’s geographical position near Europe makes it a strategic location for energy exports, particularly to Mediterranean countries. This proximity enhances TotalEnergies’ ability to supply the European market more efficiently, especially in terms of liquefied natural gas (LNG), where the company has significant investments.
  3. Diversification of Energy Sources: Engaging in Algerian energy projects allows TotalEnergies to diversify its sources of hydrocarbons, reducing reliance on any single region and mitigating geopolitical risks. This diversification strategy is crucial for maintaining a stable and reliable supply chain.
  4. Long-term Partnerships and Expansion Opportunities: TotalEnergies’ long-standing partnership with Sonatrach, the national oil company of Algeria, opens doors to further collaborations and expansion opportunities within the country. Algeria’s legal and regulatory framework, especially with the introduction of Law n°19-13 governing hydrocarbon activities, is designed to attract foreign investment and collaboration in the energy sector, providing a conducive environment for TotalEnergies to grow its operations.
  5. Commitment to Sustainability and Reduced Emissions: Algeria’s initiatives to leverage its gas resources align with TotalEnergies’ commitment to sustainability and reducing carbon emissions. By investing in gas projects, such as the development of gas resources in the Timimoun region, TotalEnergies is able to support its transition towards cleaner energy sources and reduce its environmental footprint.
  6. Enhancing Energy Security: Through its activities in Algeria, TotalEnergies contributes to the energy security of Europe, particularly France. The supply agreements for LNG, like the one involving the Fos-Cavaou terminal, are critical in ensuring a steady and secure energy supply to the European market, reflecting TotalEnergies’ role in supporting regional energy needs.

Algeria’s vast hydrocarbon resources, strategic location, and the legal framework make it an attractive and important region for TotalEnergies. The partnership with Sonatrach not only enhances TotalEnergies’ position in the global energy market but also aligns with its strategies for sustainability, diversification, and ensuring energy security for its key markets.

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