Spain said it is prepared to pay more for gas from Algeria as long as the price reflects that of international markets, Spanish paper El Pais reported, citing sources from Spain’s industry ministry.
The news follows a high-level meeting between Spanish Industry Minister Miguel Sebastian and Algerian Energy and Mines Minister Youcef Yousfi in Algiers on Monday.Â
The meeting came about after an international arbitration court in August ruled that Algerian gas company Sontatrach should be allowed to raise the price of natural gas sold to Spanish natural gas utility Gas Natural retroactively from 2007, which could cost Gas Natural about US$2 billion and could result in higher gas prices for Spanish consumers.
Miguel Sebastian, the minister responsible for Spain’s industry and energy policy, and Algerian Oil Minister Youcef Yousfi, have met twice in the past month to discuss the natural- gas dispute between Gas Natural and the Algerian state-run oil and gas provider, the newspaper added.
Gas Natural is contesting the matter, but only on formal grounds as it can’t appeal the ruling. The strategy may gain the company time to roll over some of the payments to Sonatrach to 2011.
Sebastian earlier this month said Spain needs to reach agreements with Algeria that allow it to remain one of Spain’s main energy suppliers without a “vulnerability for our energy supply or our competitiveness.”
Spain meets 30% of its gas needs with gas imports from Algeria, this figure is likely to rise as the Medgaz pipline linking it to the North African country which has suffered from numerous delays recently, begins operating.
