Italian energy firm Eni and Algeria’s state-owned oil company Sonatrach have agreed to fast-track the development of gas fields in the African nation.
The two companies will assess the gas potential and opportunities to accelerate the development of specific fields, which have been discovered by Sonatrach in the country.
Eni anticipates the gas production from the areas covered under the deal to be approximately three billion cubic metres (bcm) per year.
This will lead to increasing Algeria’s export capacity to Italy via the Transmed pipeline, the Italian firm said.
Italy has been seeking to diversify its energy supply to cut dependence on Russian supplies following Moscow’s invasion of Ukraine.
Algeria has been supplying its natural gas to Italy since 1983 through the Transmed pipeline, which runs to Sicily. The North African country was the second-biggest gas supplier for Italy in 2021, according to Reuters.
Under the memorandum of understanding, Eni and Sonatrach will also accelerate the development of green hydrogen to help increase gas exports from Algeria toward Italy.
The companies will carry out the technical and economic evaluation for a green hydrogen pilot project in Bir Rebaa North (BRN), in the Algerian desert.
The project aims to help decarbonise the BRN gas plant, which is operated by the Sonatrach-Eni GSE joint venture.
Last month, the two energy groups agreed to gradually increase gas flows in the Transmed pipeline and reach 9bcm of extra gas annually by 2023 to 2024.
Earlier this month, a consortium between Eni and TotalEnergies started drilling work at an exploration gas well off the coast of Cyprus.