Spain's GN Extends Algerian Gas Deal to 2030 (Update)
Updates the original story, with responses to NGW questions in italics
Spanish gas utility Gas Natural said June 14 it has extended its long-term gas contract with Algerian state Sonatrach until 2030.
GN said that the contract currently covers more than 40% of GN’s supplies and about 30% of Spanish consumption.
"This signing is an important step to continue reinforcing the historic strategic alliance with Sonatrach," said GN executive chairman Francisco Reynes. The signing also extends cooperation agreements made in June 2011 between the two, whereby Sonatrach became GN’s fourth shareholder with a 4% equity stake.
Sonatrach deliveries to GN are made via the Maghreb-Europe pipeline (overland via Morocco and the Strait of Gibraltar) and the Medgaz pipeline (directly subsea from Beni Saf, Algeria to Almeria, Spain).
No specific volume or pricing details were provided in the GN statement, and no Sonatrach statement was immediately available. Spain consumed 32bn m3 of gas in 2017, according to the BP Statistical Review of World Energy published June 13, so 30% of that would equate to between 9 and 10bn m3/yr.
A Gas Natural spokesperson later told NGW that it has gas supply contracts with Algeria that expire in 2020 and 2021 that add up to 9bn m3/yr, adding: "We cannot give these kind of details of the contract at the moment." She confirmed that the volumes all related to gas deliveries by pipeline, but said that GN cannot give pricing details at this time. NGW had asked if the contract would be primarily gas hub-, or oil-indexed.
The same BP report showed that Algeria piped 11.8bn m3 to Spain in 2017, which meant it remained Sonatrach's second largest export for piped gas after Italy (18bn m3).
An earlier LNG supply contract between Sonatrach and GN was allowed to lapse after 35 years in 2004, largely as a result of Algerian unhappiness at how GN re-exported the LNG to the (then-buoyant) US market without sharing any of the resultant profit with Sonatrach. Spain was the third country to start importing Algerian LNG in 1969, after Britain (1964) and France (1965).
GN exec chairman Francisco Reynes (left) and Sonatrach CEO Abdelmoumen Ould Kaddour at the June 14 signing of the extended gas supply contract (Photo credit: GN)