Algeria signs $600 mln gas contracts with Italian companies
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Since US gas is too overpriced for Italy and other EU countries, why not turn to the Iberian peninsula for a cheaper alternative?
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Algeria signs $600 mln gas contracts with Italian companies.
Algeria's national petrochemicals firm Sonatrach announced on Thursday it had signed deals worth $600 million with Italian firms for the extraction and transport of liquefied petroleum gas (LPG).
In recent months, the EU has been eyeing Algerian gas as a cheaper alternative to overpriced US gas.
The Algerian company said in a statement it concluded a $400 million deal with Italian company Tecnimont for the construction of an LPG plant scheduled to be completed in three years.
The plant is expected to produce an output of "1,000 tonnes per day of LPG, 300 tonnes per day of condensate and 8.7 million cubic metres per day of gas."
It further added that Algerian pipeline company ENAC will build a 65-kilometre (40-mile) conduit to link the plant to an existing transportation network in the country's east.
On another note, an association owned by Sonatrach and France's TotalEnergies signed a $170-million deal with Italian firm Arkad to build a unit linking 24 new wells to an existing plant.
Sonatrach also announced it concluded three other small-scale contracts for LPG-related infrastructure and equipment.
Read more: Algeria to increase oil production in bid to export more oil to EU
In recent months, the EU has been eyeing Algerian gas as a cheaper alternative to overpriced US gas.
On October 21, France, Spain and Portugal announced they agreed to build a natural gas pipeline connecting the Iberian peninsula to the rest of Europe.
The project is called the Green Energy Corridor and replaced a previous project called the MidCat which was fervently backed by Germany.
The MidCat was abandoned in 2019 over several regulatory and funding issues and the fact that it was contested in France for a very long time.
On the same day that this agreement was announced, German Chancellor Olaf Scholz announced that he will lead a government delegation to China next month, the first EU leader to make the trip since November 2019.
All this despite that Turkish President Recep Tayyip Erdogan announced that Turkey would provide the EU with Russian gas via its TurkStream pipeline.
So far, Germany is the only major EU country to have shown interest in the offer. The country is planning to send its energy minister to meet with Russia's Energy Minister in Istanbul in December.
Read more: Erdogan: EU will be able to purchase Russian gas via Turkey
