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Eni, Sonatrach boost cooperation in Algeria, eye gas hub

Eni, Sonatrach boost cooperation in Algeria, eye gas hub

Italian energy major Eni and Algeria's state-owned Sonatrach have signed an agreement aimed at strengthening their partnership in the Berkine basin and creating a gas hub in the area, Eni said in a statement on Wednesday.

"This is a further step forward in the strategic expansion of our upstream activities in Algeria and in Eni’s renegotiation of long-term gas supply contracts," said Eni's chief executive officer Claudio Descalzi.

"It also demonstrates a strong spirit of collaboration between Sonatrach and Eni, from exploration to the development of new projects in gas and renewable energy," he added.

The accord, signed by Descalzi and Sonatrach's chairman and director-general Abdelmoumem Ould Kaddour "aims to develop an ambitious programme to relaunch exploration and development in the area, by optimizing existing infrastructures," Eni stated.

In combination with the existing assets of BRN (block 403) and MLE (block 405b), the aim is to develop a gas hub in the area, Eni said.

Under the agreement, existing infrastructures will be put "in synergy with the ones newly built: a 180 Km line that will quickly connect BRN with MLE’s assets, transforming it into the Berkine basin’s main gas hub," said the statement.

Eni and Sonatrach also agreed the commercial conditions for the 2018-19 thermal year, in line with the gas market. Additionally, as part of moves to strengthen their cooperation and partnership, the two companies have agreed to begin a negotiation to look into extending the gas supply beyond the contractual deadline of 2019, Sonatrach said.

Eni and Sonatrach will also further strengthen their cooperation in petrochemicals, renewables, offshore projects in Algeria and elsewhere, according to the statement.

Eni has been doing business in Algeria since 1981 and currently operates 32 mining permits in the country, with an equity production of over 100,000 barrels of oil equivalent per day, making the company the country’s main international player.