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Algerian state giant Sonatrach has been courting international oil companies to capitalise on the potential to ramp up deliveries to Europe, but African Energy’s soundings suggest there are plenty of reasons for caution, despite the improved investment climate since hydrocarbons sector reforms were unveiled.

The Société Algérienne des Energies Renouvelables (Algerian Renewable Energy Company, or Shaems) joint venture of state giants Sonatrach and Sonelgaz may be preparing soon to finally move ahead with the tender for international and local investors to supply 1GW of solar power.

Adding to the welter of joint schemes discussed during Italian head of government Giorgia Meloni’s 23 January visit to Algiers was the potential revival of the Galsi pipeline. The ‘Gazoduc Algérie-Sardaigne-Italie’ project was first proposed in 2000 to carry 8 bcm/yr from Koudiet Draouche to Sardinia and on to Piombo and the mainland.

Algerian state giant Sonatrach subsidiary Sonatrach Raffineria Italiana and South Africa’s Sasol Italy have been meeting local stakeholders in Sicily to promote their Hybla project to build a plant producing hydrogen and low-carbon syngas (a mixture of hydrogen and carbon monoxide).

Under instructions from President Abdelmadjid Tebboune, Algerian state utility Sonelgaz sent a “highly qualified” mission to Cuba on 19-25 January to study a solar generation project in Havana.

While most of Sonatrach’s investment under its $40bn five-year plan is due to go into exploration and production, the national oil company has also planned downstream investments of around $7bn in the period to 2027.

Buoyed by Eni’s success at bringing new upstream projects on stream at pace and the changed outlook for investment and exports as the war in Ukraine approaches its first anniversary, Sonatrach is aiming for a rise in activity to boost output in North Africa’s gas giant, write James Gavin and Jon Marks

Algerian utility Sonelgaz is promoting plans to export more power to its neighbours in North Africa and across the Mediterranean to Europe.

Algeria’s upstream sector received a boost in early November, when Eni announced the start-up of the HDLE/HDLS oil field, in the Berkine North Basin’s Zemlet El Arbi concession – only six months after its discovery in March.

Industry observers report that the flow of contracts coming from Sonatrach contract remains slow, compared with the national oil company’s publicly stated ambitions. However, a number of headline awards have been announced in recent months.

Algeria’s ability to supply more gas has become a strategic priority since its close ally Russia invaded Ukraine. But while Algiers claims a recent series of supply deals and co-operation agreements points to its critical role in meeting surging demand  in Europe, some things are not changing as quickly at state company Sonatrach as the positive headlines suggest, write James Gavin and Jon Marks, with additional reporting by Our Algiers Correspondent and John Hamilton.

The Indian government and parastatals are discussing taking liquefied natural gas (LNG) from Algeria and Angola under long-term supply agreements in response to the energy crisis. The African countries are not alone, as New Delhi has also said it has reached out to other big producers including the United States, United Arab Emirates, Saudi Arabia and Iraq, as the government seeks to reassure anxious markets.

Algeria underlined its commitment to supplying increased volumes of gas to Italy, when Sonatrach president director-general Toufik Hakkar said on 21 September that deliveries would rise by around 13% this year to 25.2bcm.

Eni has announced the completion of its acquisition of UK supermajor BP’s assets in Algeria, including working interests in the In Amenas (45.89%) and In Salah (33.15%) gas fields, which together produced 11bcm in 2021. The purchase adds to a flow of recent deals has buttressed Eni’s position as the leading international oil company (IOC) in north-west Africa.

A new Algerian Investment Law (No 22-18) has been published in the Journal Officiel (official gazette), introducing some new incentives while repealing the former Law No 16-09 of 2016.