Eni has started production at two gas fields in its Berkine Sud contract in Algeria.
The Italian company said it would add the new production to its Berkine Nord contract and then into the European market.
It has started the two fields just six months after agreeing the contract. The new licence is the first to begin producing under the new hydrocarbon law, 19-13.
Eni and Sonatrach are producing 1 million cubic metres per day from Berkine Sud and around 4,000 barrels per day of associated liquids. It aims to increase this to 2 mcm per day by the end of the year, which will help the Menzel Ledjmet East (MLE) facility reach capacity of 11 mcm per day.
Sonatrach and Eni signed the Berkine Basin licence in December 2021. It covers 7,880 square km in the south of the basin. Eni has said the work involves a $1.4 billion investment.
Speaking at the time, Eni CEO Claudio Descalzi said the deal committed the two sides to “accelerated project development”. He also noted decarbonisation objectives.
The Italian company recently struck a deal to buy BP’s interests in Algeria, at In Amenas and In Salah. In late 2021, Eni was producing 95,000 barrels of oil equivalent per day in Algeria and it expects to increase this to more than 120,000 boepd in 2023.
Sonatrach announced the completion of gas price renegotiations with Spain’s Naturgy last week. The contract covers deliveries via the Medgaz pipeline.
The two did not disclose the new pricing conditions. Sonatrach described it as a revision in light of market developments and that the contracts were balanced on a “win-win basis”.
Sonatrach has also recently signed amended contracts with Enel.