Spain’s Naturgy and Algeria’s Sonatrach announced Thursday a natural gas supply agreement after five months of “tough” negotiations, Kallanish Energy reports.
The companies said in separate statements they have signed amendments to their gas marketing contracts, setting terms of delivery until 2030. These contracts were first signed in 1970. Details on volumes and financial terms weren’t disclosed.
“The Sonatrach group currently sells more than 12 billion cubic meters (Bcm) of natural gas in Spain, including 8 Bcm to the Naturgy group,” said Sonatrach’s CEO Toufik Hakkar. “We are long-standing partners.”
The companies own the Medgaz pipeline, connecting natural gas reserves in Algeria to consuming markets in Spain. Naturgy owns a 49% stake and Sonatrach 51%.
The pipeline is undergoing an expansion project to increase its capacity by 2 Bcm to reach 10 Bcm by 2021.
Naturgy’s CEO Francisco Reynés said the agreement demonstrates the willingness of the companies to continue their long-term partnership started decades ago. “This strategic alliance is key for the supply of competitive and safe gas to the Spanish market, and therefore key for the economic and social development of both countries,” he added.
The parties are discussing further cooperation in areas including exploration, production, marketing and transport of energy, both in Algeria and in Spain.
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