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Sonatrach to supply gas in Germany for the first time

Joshua Falcón.

Published: February 18, 2024

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Germany will for the first time receive natural gas through a pipeline from Algeria, thanks to a medium-term contract signed between a subsidiary of the trader VNG AG and the state-owned oil and gas company SonatrachThe companies announced on Thursday, February 8, 2024, according to Reuters reports.

Sonatrach CEO Rachid Hachichi expressed his satisfaction at strengthening energy trade partnerships with Europe through this historic agreement with VNG. This agreement makes VNG the first German company to buy gas from Algeria through a pipeline, according to statements by VNG’s CEO.

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The agreement was made with VNG Handel & Vertrieb GmbH (VNG), a wholly owned subsidiary of VNG AG, headquartered in Leipzig. Although no specific details were provided on the duration or value of the contract.

Germany’s search for new suppliers intensified following Russia’s invasion of Ukraine in February 2022, ending decades of German dependence on Russian gas.

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It should be noted that Algeria’s gas production stands at 106 billion cubic meters per year, according to figures published by Sonatrach.

European energy diversification and security

This new agreement between Germany and Algeria not only marks a milestone in energy trade relations between Europe and Algeria, but also underlines the growing importance of diversification of energy sources for European energy security. In a global context where dependence on a single energy source or supplier can lead to geopolitical and economic vulnerabilities, the inclusion of Algeria as a natural gas supplier to Germany reflects a conscious effort by European countries to broaden their energy supply portfolio.

This not only improves energy security by reducing dependence on individual suppliers, but also offers the opportunity to negotiate better terms of trade, contributing to the stability of energy markets.

In addition, this approach can foster international cooperation and the development of infrastructure that benefits multiple parties. In the long term, energy diversification is a crucial component of the transition to a more sustainable energy system that is less susceptible to political and market fluctuations.

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Source: worldpipelines.com