After three years of court battles over prices between Spain’s Gas Natural and Algeria’s Sonatrach, an arbitration panel said that Spain’s Gas Natural must pay Algeria’s Sonatrach more for gas, implying higher prices for a quarter of Spain’s gas supply.
The tribunal recognised Sonatrach’s right to hike up the price of gas supplied to Spain through the Maghreb Europe pipeline since 2007. The Spanish company will have to pay about US$1.9 billion for the gas provided in 2007, 2008 and 2009,
“The company is studying this decision, which it does not agree with, to make a more detailed assessment and determine what actions it can take to defend its rights,” Gas Natural said in a statement .
When the dispute was first taken to court in 2007, Algeria’s energy minister at the time, Chakib Khelil, said Sonatrach was losing about $600 million a year from Gas Natural’s refusal to pay a 20% price increase.
Gas Natural said it will pay the difference owed, as determined by the court, with money it had set aside during the years of the court battle and will also consider raising prices for some of its clients.
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