London — Italy's Enel has agreed to extend its Algerian gas import deal with state-owned Sonatrach to 2028, with the possibility of adding a further two years to the agreement at a later date, the utility said Wednesday.
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Enel's existing long-term gas import deal with Sonatrach from 1997 -- which was originally for some 6 Bcm/year -- was due to expire at the end of 2019.
Sonatrach has moved to renew a number of its export deals with European buyers in recent months as it looks to lock in long-term supplies to the end of the next decade amid an increasingly competitive European market.
Earlier this month, Portugal's Galp agreed to buy 2.5 Bcm/year of Algerian gas from Sonatrach for a period of up to 10 years, replacing a previous 23-year deal for 2.3 Bcm/year set to expire at the end of this year.
That deal followed another new long-term contract Sonatrach agreed with a European buyer, Italy's Eni, in mid-May. That new agreement is for the import of Algerian gas through 2027 with an option to be extended by a further two years to 2029.
The deals come at a critical juncture for Algeria, whose president, Abdelaziz Bouteflika, resigned in April after almost 20 years in power, amid regular civilian protests against the ruling administration.
Enel said its new agreement -- whose volume were not disclosed -- with Sonatrach consolidated the relationship between the two companies.
"The new contract terms enable Enel to make its gas supply portfolio more diversified, competitive and flexible, providing security of supply to the Italian system," Enel said.
It said it also reflected the evolution of the Italian gas market since the first supply contracts were signed in 1991.
-- Stuart Elliott, firstname.lastname@example.org
-- Edited by Dan Lalor, email@example.com