German energy company VNG AG has signed the country’s first gas supply contract via pipeline with Algerian state company Sonatrach. Bloomberg reports this, citing a statement made by VNG chairman Ulf Heitmüller during the visit of a German business delegation to Algeria.
According to the agency’s news, citing sources, the agreement between VNG and Sonatrach entered into force in January 2024. Other details of the contract, including supply period and volume, have not yet been disclosed.
Germany is actively seeking alternative gas sources after supplies from Russia decreased due to the conflict in Ukraine. So far, this gap is mostly being filled through LNG. New long-term contracts for pipeline gas are rare due to importers’ dependence on the volatile spot market.
The agreement underlines the importance of Algeria to Europe’s energy security. Algeria accounts for 14% of the EU’s gas and LNG imports. German Economy Minister Robert Habeck is negotiating over Algeria’s “green” hydrogen, which is planned to be supplied to the EU via natural gas pipelines in the future.
Before this, it was known which European country was augmented Gas purchase from the Russian Federation.
Previous levels of gas reserves in Europe I went down Below 69%.