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Total extends agreement

with Sonatrach on LNG

ALGERIA FRANCE’S Total and Algeria’s Sonatrach have deteriorated after Algeria blocked the sale of
agreed to extend their existing LNG supply part- Occidental Petroleum assets previously owned
nership by three years. As a result, Sonatrach will by Anadarko Petroleum to the French company.
continue to provide 2mn tonnes per year (tpy) of Total’s CEO, Patrick Pouyanné, said dur-
Algerian LNG to the French market, primarily ing the company’s first-quarter earnings call
through the import terminal at Fos Cavaou, on in May that it had been officially informed by
the southern coast of France. Occidental that it would not be able to acquire
The agreement also includes the sub-charter the Algerian assets on objections from Algiers.
of a Total LNG tanker by Sonatrach, the French Occidental is now expected to hold onto the
company said in a June 25 statement. assets, unless some new way to overcome
“This agreement is part of the long history Algiers’ opposition to the deal can be found.
of co-operation between Total and Sonatrach,” According to the International Group of
Total’s president of gas, Laurent Vivier, stated. LNG Importers (GIIGNL), Sonatrach and Total
“Thanks to the quality of our relationship we have two agreements dating from 1972 that were
were able to conclude it in an extremely volatile due to expire this year. Under these agreements,
market environment. This new contract further Total has been receiving 1.5mn tpy and 2.5mn
enhances the flexibility of Total’s LNG portfolio tpy on a delivered ex-ship (DES) basis.
and strengthens our position as a major partner The extension thus covers a smaller volume
of Sonatrach.” of LNG, but nonetheless is likely to be a welcome
In its own statement, Sonatrach echoed the development for Sonatrach as Europe increas-
message about the partners’ pre-existing rela- ingly diversifies its sources of gas supply. Indeed,
tionship, and how it had helped them to agree the Algerian company has a number of contracts
to the extension. However, Reuters reported, that will soon come up for expiry, including a
citing sources familiar with the situation, that 720,000 tpy deal with Greece’s DEPA, which is
relations between Sonatrach and Total had due to end in 2021. ™

France will import Algerian LNG via the Fos Cavaou terminal (Photo: Fosmax LNG)

P16 www. NEWSBASE .com Week 26 01•July•2020