Gazprom and Algerian state-owned oil & gas corporation Sonatrach today have inked a Memorandum of understanding within the framework of a meeting between Viktor Khristenko, Industry & Energy Minister of the Russian Federation and Chakib Khelil, Energy & Mining Minister of Algeria.

Signing the Memorandum on behalf of Gazprom and the Algerian side were Alexander Ryazanov, Deputy Chairman of the Gazprom Management Committee and Chawki Rahal, Vice President of Sonatrach, respectively.

The Memorandum opens way for deeper cooperation between the companies, identifying, among other things, the following major directions of further joint businesses in the oil & gas sector: geological exploration, production, transmission, gas transmission and distribution network development, asset swaps, natural gas and oil processing & marketing in Algeria, Russia and third countries.

To promote the accords fixed in the Memorandum, the parties will set up a Coordinating Committee and standing joint working groups.

On August 3, 2006, Dmitry Medvedev, First Deputy Chairman of the Government of the Russian Federation, Chairman of the Gazprom Board of Directors met with Chakib Khelil, Energy & Mining Minister of Algeria. The parties addressed issues of multilateral cooperation in the oil & gas sector, including liquefied natural gas supply, and examined the possibility of implementing joint projects in international energy markets.

The Gazprom Headquarters also hosted yesterday a working meeting between Alexander Ryazanov and Chakib Khelil. The meeting discussed concrete steps to promote full-scale cooperation between Gazprom and Algeria in the oil & gas sector, as well as organizational forms of such interaction. Particular attention was paid to cooperation in the LNG sector, with Sonatrach to be potentially involved in the Baltic LNG project.

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The second-largest in Africa after Nigeria (5 tcm), Algeria’s proven natural gas reserves account for 4.55 tcm, with the bulk situated in the country’s central and eastern parts.

The country’s proven oil reserves make up 1.5 bln t (third-largest in Africa after Libya and Nigeria).

The share of natural gas, oil, coal and hydropower in the Algerian energy mix stands at 62.5, 34.5, 2.5 and 0.5 per cent, respectively.

Algerian state-owned oil & gas corporation Sonatrach caters for oil and natural gas exploration, transmission and marketing, controls the bulk of gas extraction and wholesale operations.

In 2005 Sonatrach produced 85 bcm of natural gas and supplied 21.2 bcm to domestic consumers. The company imports pipeline natural gas to Italy, Spain, Portugal, Tunisia and Slovenia, and ships LNG to France, Spain, the USA, Turkey, Belgium, Italy, Greece and South Korea.