VNG and partners looking into green hydrogen import from Algeria via SoutH2 Corridor

Germany’s VNG, Algeria’s Sonatrach and Sonelgaz, Italy’s Snam and SeaCorridor, and Austria’s Verbund have signed a memorandum of understanding (MoU) to jointly examine the feasibility of a project for large-scale hydrogen production in Algeria and its export via planned SoutH2 Corridor to Italy, Austria, and Germany.

The agreement signed on October 14, 2024, sets out the framework for further cooperation among the companies, including the preparation of joint studies.

Specifically, the partners agreed to explore the technical and economic feasibility of a large-scale project along the entire green hydrogen value chain using the SoutH2 Corridor.

Hans-Joachim Polk, Member of the Board of Management for Infrastructure and Technology at VNG AG, said: “After VNG signed a supply contract for Algerian pipeline gas at the beginning of the year, we are delighted to have laid the foundation for a broadly based hydrogen partnership today. Algeria has enormous potential in the production of this future energy source and is therefore an important partner for us. If we can source green hydrogen from Algeria, we will diversify our corporate supply portfolio and make an important contribution to future security of supply with decarbonised gases.

“I am especially pleased that we will be undertaking project jointly with Algerian, Italian and Austrian partners. International cooperation will play an essential role in rolling out the hydrogen economy in Germany and the rest of Europe, because the demand for hydrogen cannot be met by domestic production alone.”

SoutH2 Corridor is a planned hydrogen-ready pipeline corridor connecting North Africa to central Europe led by transmission system operators (TSOs) Snam, TAG, GCA and bayernets, who each individually submitted Project of Common Interest (PCI) applications under the EU Commission’s TEN-E regulation in December 2022. 

The 3,300-kilometer-long corridor, which is a part of the European Hydrogen Backbone, has a hydrogen import capacity of more than 4 million tonnes per annum (mtpa) from North Afric.

A high proportion of repurposed pipelines (>70%) is expected to enable cost-effective transportation, whilst access to favorable renewable hydrogen production locations (wind and solar) in North Africa will enable competitive production.

As explained, renewable hydrogen would be largely produced in North Africa, for which the partners have collected signed letters of support from producers intending to produce c. 2,5 mtpa of renewable hydrogen.

It would then flow North, serving the hard-to-abate demand clusters of Italy (e.g. Augusta, Taranto and northern Italy), Austria (e.g. Styria, Vienna and Linz) and Germany (e.g. Burghausen and Ingolstadt). Transportation of domestic production in each of the member states would also be facilitated through the SoutH2 Corridor.

The SoutH2 is expected to be fully operational as early as 2030 and it consists of the individual PCI project candidates:

• “Italian H2 Backbone” promoted by Snam Rete Gas;
• “H2 Readiness of the TAG pipeline system” promoted by TAG;
• “H2 Backbone WAG + Penta-West” promoted by GCA; and
• “HyPipe Bavaria – The Hydrogen Hub” promoted by bayernets.