German utility VNG AG signed a deal for the country’s first delivery of pipeline gas from the Algerian state energy giant Sonatrach, as Berlin looks to strengthen its energy ties with the North African country.

“The contract lays the foundation for a trusting supply relationship, opens up new perspectives and strengthens the German-Algerian energy partnership,” VNG CEO Ulf Heitmüller said in a statement during a German business delegation visit to Algeria.

The agreement, which took effect in January, allows gas to be shipped via pipeline to Italy and then on to Germany, a spokesperson for Sonatrach said.

Heitmüller earlier told Bloomberg that the contract is “only a small one, and we are looking at expanding it.” The Leipzig-based utility, majority-owned by EnBW Baden-Wuerttemberg AG, is also looking to establish a partnership with Sonatrach to import hydrogen into Germany.

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The VNG-Sonatrach deal also highlights the possibility of Europe strengthening its relationship with Algeria. The North African country accounts for about 14% of the EU’s total imports of both pipeline gas and LNG, according to the bloc’s latest market data.

“We now want to expand this and encourage Algeria to produce more green hydrogen in the future, invest more in solar and wind energy and thus create its own added value,” Economy Minister Robert Habeck, who is leading the business delegation, said in a statement.

Habeck and Algerian Energy Minister Mohamed Arkab on February 8 signed a declaration of intent to set up a hydrogen task force, including a pilot plant. Feasibility studies for the project are underway.