Spain’s Gas Natural Fenosa said it has signed an agreement with Algeria’s Sonatrach to renew the gas purchase contracts from Algeria spanning to 2030.
The agreement currently represent more than 40 per cent of Gas Natural Fenosa’s overall procurement, the Spanish company said.
“This agreement is a major step forward to strengthen our historical strategic alliance with Sonatrach. Moreover, it undoubtedly constitutes a significant milestone in the relationship with Algeria as this renewal guarantees the stability of gas supply to Spain,” Francisco Reynés, executive chairman of Gas Natural Fenosa, said.
In addition to contributing to the security of supply to the Spanish market, the agreement reinforces an optimal distribution of the supply mix for the country between natural gas (NG) supplied via pipelines, which represents 30 per cent of domestic consumption, and liquefied natural gas (LNG).
With this renewal, the relationship between Gas Natural Fenosa, Spain’s leading gas company, and Sonatrach, the largest gas supplier to Spain continues to move forward, once again, building on a 40-year old partnership.
Gas Natural Fenosa was one of the first operators in the world to opt for the Algerian gas supply and currently is one of Sonatrach’s two main customers worldwide. Since the agreements reached in June 2011, the Algerian company has become the fourth largest shareholder of Gas Natural Fenosa with a 4 per cent shareholding.
The negotiations for the contract extensions have allowed both parties to reach favourable agreements.