Algeria’s state oil and gas company, Sonatrach, has signed a 30-year production sharing agreement with Saudi Arabian firm Midad Energy to explore and produce gas in the Illizi Basin in eastern Algeria, Ennahar TV reported on Monday. The agreement, valued at $5.4 billion, includes a seven-year exploration period and may be extended by a further decade.

The deal comes as Algeria accelerates efforts to expand its gas production and exports, particularly to European markets seeking alternatives to Russian pipeline supplies. The North African country is also nearing finalization of agreements with U.S. majors Exxon and Chevron for shale gas exploration and development.

Algeria possesses substantial conventional gas reserves and is estimated to hold the world’s third-largest shale gas resources, behind China and Argentina. The country has increasingly opened its energy sector to foreign investment, with several non-U.S. firms competing for exploration rights.

Under the agreement, Midad Energy North Africa, a subsidiary of Saudi-based Alturki Holding, will finance the project entirely, including $288 million allocated for exploration activities during the initial seven-year period.