CEZ enhances energy security by entering into a contract for gas supplies from Algeria

Source: www.gulfoilandgas.com 10/31/2024, Location: Europe

After two years of demanding negotiations, CEZ trading experts have concluded a contract with the Algerian company SONATRACH for the supply of gas from Algeria. The supplies were launched in October this year. Gas will travel from Algeria via Tunisia, then through an undersea pipeline to Italy, and on to Europe and Czech Republic. The contract for an annual volume that will be able to cover the annual consumption of some 100,000 households, representing approximately 2 percent of the country’s annual gas consumption. CEZ has been supported by the Ministry of Trade and Industry of the Czech Republic, the Ministry of Foreign Affairs of the Czech Republic, and the Czech Embassy in Algeria.

“We have taken yet another step towards enhancing our energy security. In addition to the supply of gas from German suppliers, from Norway, and from our LNG terminal in Eemshaven, we will now also bring gas from fields in Northern Africa. Negotiations with the Algerian state-owned company SONATRACH were constructive and brought to a successful conclusion,” said CEZ’s CEO Daniel Beneš.

CEZ will purchase gas from Algeria on its own account, without financial involvement of the Czech State. Furthermore, this deal helps CEZ expand its geographic range of potential gas suppliers, to meet the needs of the Czech Republic, securing another route that will make it possible to supply gas to the country, should there be a shortage on the domestic market.

“For the energy security of the Czech Republic, it is essential to work with trusted partners and diversify gas supplies as much as possible. The more trade routes we have for the supply of this essential commodity, the less we will be affected by potential supply shortages elsewhere. Our goal is to continue connecting Czech traders with alternative suppliers. Algeria is one such partner, and I am very pleased that, following negotiations, we have managed to secure supplies capable of meeting the consumption needs of up to 100,000 Czech households,” says Minister of Industry and Trade Lukáš Vlcek.

“We are addressing the European energy crisis in a comprehensive manner. We are glad that our embassy was able to assist CEZ in that sense, and that in the end an agreement with SONATRACH from Algeria was reached. Such assistance is one of the important tasks of our diplomacy,” said Minister of Foreign Affairs Jan Lipavský.

This step has come shortly after celebrations of the second anniversary of the LNG terminal in which the Czech Republic obtained its first-ever capacity. The facility in Eemshaven, the Netherlands, is able to process eight billion cubic metres of gas per year, of which up to three billion are earmarked for the Czech Republic. That volume amounts to more than a third of the country’s annual consumption. During the two years of the terminal’s operation, 43 ships arrived there with gas designated for the Czech Republic, carrying the equivalent of 3,86 billion cubic metres of gas. Besides CEZ, the terminal’s capacity is used by the multinational companies Shell and Engie. No Russian gas has arrived at the terminal since the start of its operation, which was one of the explicit tender conditions.

At the end of 2023, CEZ also secured further LNG capacity for the Czech Republic, amounting to 2 billion cubic metres per year for 15 years, with an option to extend to 25 years, in the newly built onshore terminal at Stade, Germany, at the mouth of the River Elbe. The construction of the terminal commenced this spring, and it is scheduled to be launched in the second half of 2027.


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