German utility company “VNG” has struck its first deal to supply gas via pipelines to Germany with the Algerian energy giant “Sonatrach.”
Olf Heydemueller, CEO of VNG, stated on the sidelines of a German business delegation’s visit to Algeria that “the contract signed is just a small step, and we look forward to expanding it.”
EnBW Baden-Wuerttemberg AG holds the majority stake in the company based in Leipzig, Germany.
Bloomberg earlier reported, citing people familiar with the matter, that the agreement took effect as of last January. Other details, including the duration of the deal and the volume to be delivered, were not immediately available.
In January 2024, ExxonMobil, one of the world’s largest oil firms, announced plans to explore gas and oil in Algeria.
An ExxonMobil delegation discussed the deal with Algeria’s Energy and Mines Minister Mohammed Arkab in the capital Algiers, the Arabic language daily Elkhabar reported, citing a Ministry statement.
“The two sides held talks on ExxonMobil’s investments in Algeria and the current consultations between the two sides on oil exploration in some areas in Algeria,” the statement read.
“The two sides stressed they will continue such consultations which aim to reach an agreement in the next few days for exploration and oilfield development,” it added.
Natural gas production in Algeria is projected to grow at an annual rate of 1.4%, reaching 146.7 billion cubic meters by the year 2028.
The Director General for Forecasting at the Ministry of Energy and Mines, Miloud Medjelled, indicated that this increase is due to the activation of new gas fields during 2024-2028, with an additional output of 16.3 billion cubic meters.
