Baker Hughes to Support Strategic Gas Project in Algeria to Enhance Italy, Europe’s Energy Security
Baker Hughes (NASDAQ: BKR) has been awarded a major contract by SONATRACH for a gas-boosting project at the Hassi R’Mel gas field in Algeria. The project, in collaboration with Tecnimont (part of MAIRE), aims to enhance Algeria's energy system and support Europe's energy security. The scope includes 20 compression trains leveraging Frame 5 gas turbine and BCL compressor technology. The project is essential in stabilizing and boosting natural gas production, thereby solidifying Algeria as a key energy supplier to Europe. Manufacturing and testing will occur at Baker Hughes' facilities in Italy, emphasizing bilateral cooperation between Algeria and Italy.
- Award of major contract to Baker Hughes, enhancing company portfolio.
- Project supports Europe's energy security, especially for Italy.
- 20 compression trains to boost and stabilize gas production.
- Hassi R’Mel gas field is a significant global energy supplier.
- Strengthens bilateral relations between Algeria and Italy.
- Manufacturing and testing based in Italy, leveraging Italian industrial expertise.
- No financial terms disclosed, potential uncertainty for investors.
- Project success highly dependent on geopolitical stability in Algeria.
- Operational challenges and timeline risks inherent in large-scale energy projects.
Insights
The agreement between Baker Hughes, Tecnimont and SONATRACH reflects a strategic move within the energy sector, particularly concerning natural gas supply to Europe. By enhancing the gas production capacity at the Hassi R’ Mel gas field, Algeria is poised to solidify its position as a significant energy supplier to Europe, especially at a time when energy security is a priority.
Key Takeaways:
- Energy Security: This project will likely bolster Europe's energy security by stabilizing and potentially expanding gas supplies, reducing dependence on less stable regions.
- Geopolitical Dynamics: The agreement reinforces the bilateral relationship between Algeria and Italy, aligning with the broader Mattei Plan's objectives to foster cooperation and development across various sectors.
For investors, this project signifies Baker Hughes’ strategic positioning in the global energy market and its potential to capitalize on Europe's energy transition. However, it is important to monitor how geopolitical developments and market dynamics might influence future project outcomes and energy pricing.
Overall, this announcement strengthens Baker Hughes' portfolio and its role in geopolitically significant energy projects.
Baker Hughes’ involvement in this Algerian gas project highlights its robust financial and operational strategy. Securing a major contract with SONATRACH not only emphasizes Baker Hughes’ technological capabilities but also forecasts potential financial gains stemming from this long-term project.
Key Implications:
- Revenue Growth: The supply of 20 compression trains and associated services represents a significant revenue stream over the project's lifecycle.
- Operational Impact: The project underscores the importance of Baker Hughes' Frame 5 gas turbine and BCL compressor technology, which may lead to further contracts in the future.
From a financial perspective, investors should note that large-scale contracts like these can enhance Baker Hughes’ revenue stability and growth prospects. However, it is essential to consider potential risks such as project execution challenges or geopolitical uncertainties that could impact timelines and costs.
- Consortium with Tecnimont (MAIRE) will supply SONATRACH with 20 compression trains that are expected to boost gas production at the Hassi R’ Mel gas field in Algeria, one of the world’s largest
- Project is critical to enhance resilience of Algeria’s energy ecosystem, supporting Europe’s energy security by ensuring stable gas supplies
- Agreement strengthens Italy-Algeria bilateral relations as Baker Hughes and Tecnimont will leverage their Italian industrial expertise to deliver on the project
ALGIERS, Algeria, May 23, 2024 (GLOBE NEWSWIRE) -- Baker Hughes (NASDAQ: BKR), an energy technology company, announced Thursday it was awarded a major contract from SONATRACH for a gas-boosting project for the Hassi R’Mel gas field in Algeria. The contract is part of a broader order awarded to a consortium between Baker Hughes and Tecnimont, part of technology and engineering group MAIRE. The signing ceremony took place in Algiers in the presence of the three company CEOs: Rachid Hachichi of SONATRACH, Lorenzo Simonelli of Baker Hughes, and Alessandro Bernini of MAIRE, as well as H.E. Mohamed Arkab, Minister of Energy & Mines.
Baker Hughes’ awarded scope includes the supply of 20 compression trains based on Frame 5 gas turbine and BCL compressor technology, which will be installed across three gas boosting stations within the Hassi R’ Mel gas field. Located 550 km south of Algiers, Hassi R’ Mel is the largest gas field in Algeria and one of the largest in the world, representing a key source of energy supply for Algeria and Europe. Baker Hughes’ proven technology solutions are expected to play a central role in the project by boosting and stabilizing the pressure of natural gas and increasing production at site, which will enhance Algeria’s domestic energy system and economy as well as Europe’s energy security.
“Today’s announcement marks a notable milestone in our historical collaboration with SONATRACH for key energy projects in Algeria that have played a crucial role in supplying reliable energy to Europe,” said Lorenzo Simonelli, chairman and CEO of Baker Hughes. “We have long believed that it is critical to increase gas within the overall global energy mix to help achieve a lower-carbon economy. This project helps to solve for energy producers’ multi-faceted challenge of driving sustainable energy development as energy demand increases. We are proud to support such a critical energy project in partnership with Tecnimont.”
The new gas-boosting stations are part of Algeria’s ambitious plan to strengthen its role in the global energy market and its commitment to natural gas as a key energy source for socio-economic development. According to Bloomberg NEF, Algeria became the second-largest gas supplier to Europe in 2023, further strengthening the country’s role in enhancing the energy security of the continent, particularly in Italy where Algeria represents the biggest single source of import. The Hassi R’ Mel Project is part of a broader strategic collaboration between Algeria and Italy, which includes recently signed agreements to foster bilateral cooperation and provide financial support for Algeria’s gas production as part of the Mattei Plan. The Mattei Plan seeks to promote cooperation between Africa and Italy along five main policy pillars: education and training, agriculture, health, water and energy.
Packaging of the compressor trains, as well as manufacturing of the compressors and testing of the trains, will take place at Baker Hughes’ facilities in Italy.
About Baker Hughes
Baker Hughes (NASDAQ: BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com.
For more information, please contact:
Media Relations
Chiara Toniato
+39 3463823419
chiara.toniato@bakerhughes.com
Investor Relations
Chase Mulvehill
+1 281-809-9088
investor.relations@bakerhughes.com
FAQ
What is the recent major contract awarded to Baker Hughes in Algeria?
How will the Baker Hughes project in Algeria benefit Europe's energy security?
What technology will Baker Hughes supply for the Algeria project?
What is the significance of the Hassi R’Mel gas field?
How does the Baker Hughes project in Algeria strengthen Italy-Algeria relations?
Where will the manufacturing and testing for the Baker Hughes project take place?
