Spain (bbabo.net), - The Algerian state-owned company Sonatrach and Spain's Naturgy Energy Group are currently revising a long-term agreement for the supply of natural gas from Algeria to Spain, concluded more than a year ago. This was reported by the Al-Masar news portal on September 21.

Given the market situation, all parties take it for granted that supplies will rise in price in line with world price developments. “Sources familiar with the negotiations between the companies say that Algeria is introducing amendments to the agreement, which, if implemented, could double or triple the current cost of supplies,” Spanish media sources say.

Algeria is trying to sell gas pegged to the price of the largest European hub TTF, and not to the price of oil products, as before. Such market formulas are already incorporated into long-term contracts, for example, by Gazprom and the Norwegian Equinor.

Algeria was one of the few countries that still supplied gas to Europe under a formula pegged to Brent oil prices. As a result, the cost of African gas for Italy and Spain may be $500 per thousand cubic meters, while exchange quotations have been exceeding $2,000 for many months.

“This has nothing to do with Ukraine or Morocco. Achieving the current price is not easy because the market quotes change every day. No one doubts that today gas is much more expensive than it was three years ago,” Francisco Reines, head of the Spanish Naturgy, told La Vanguardia.

bbabo.Net