Italian energy company Eni has signed a new gas deal with Algeria’s National Oil Company, Sonatrach, aiming to create a gas hub in the region of the Berkine basin. 

The deal is an extension of a framework agreement that was signed last April, looking to develop a programme to relaunch exploration and development in the area.

Under the agreement Sonatrach and Eni have agreed to optimise existing infrastructure and integrate them with newly built infrastructure, including a 180 kilometre-long pipeline that will connecting to gas reserves in BRN (block 403) and MLE (block 405b).

Eni and Sonatrach have also agreed commercial conditions for 2018-19.

The two companies have also said they will start negotiations about extending the gas supply beyond the contractual deadline of 2019.

“This is a further step forward in the strategic expansion of our upstream activities in Algeria, and in Eni’s renegotiation of long-term gas supply contracts,” says Claudio Descalzi, CEO of Eni.

“It also demonstrates a strong spirit of collaboration between Sonatrach and Eni, from exploration to the development of new projects in gas and renewable energy,” .