Sonatrach has made a significant addition to its reserves at the Hassi R’Mel licence.
The LD2 Lias carbonate reservoir may hold from 100 to 340 billion cubic metres of gas condensate, the Algerian company said. The find is the largest reserve addition in the last 20 years, it said.
Sonatrach has begun development work to confirm estimated volumes and aims to begin producing in November this year. The company said it intends to reach production of 10 million cubic metres per day.
Hassi R’Mel is the largest gas field in Algeria, with a production target of 180 mcm per day.
Algeria is set to play an increasingly important role in supplying gas to Europe, as an alternative to Russian supplies.
Italy has made substantial headway in striking accords with Algiers on additional gas.
Bloomberg quoted Eni CEO Claudio Descalzi on the weekend as saying imports from Algeria had more than doubled, to 64 mcm via pipeline and 4 mcm of LNG. More is expected to come in following weeks.
Furthermore, the news agency reported Italy may avoid energy emergency declarations as a result of the additional Algerian supplies.
Spain also has major pipeline links with Algeria, but political relations are more difficult. Madrid aligned itself with Morocco on the Western Sahara dispute, triggering a protest from Algiers.
This has not disrupted gas supplies via Medgaz. S&P Global Commodity Insights reported that Medgaz flows averaged 22 mcm per day in 2021. In 2022, this increased to 26 mcm.
Given the heightened demand for Algerian gas, tackling leaks should be a priority. Satellite monitoring consultants Kayrros reported major emissions in late May from the Medgaz pipeline, at a rate of 118 tonnes of methane per hour at peak.
Greenpeace’s Unearthed unit has also reported consistent leaks from equipment at Hassi R’Mel. Out of 384 days with good satellite images between 2017 and 2022, it found methane spikes on 188 days.
Stronger demand is certainly paying off for Sonatrach. In 2021, the company reported revenues of $35.4 billion. For 2022, it expects to reach $50bn.