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Algeria to review long-term gas contracts to adapt to market

Reuters Hassi Messaoud, Algeria: Algeria is reviewing its long-term gas contracts, most of which end in 2018-2019, to adapt to the market and will use a mix of spot and long-term contracts to get the best conditions, state-run Sonatrach’s chief executive said yesterday. The North African country is a major supplier of natural gas to Europe with total Algerian exports expected to grow to 57 billion cubic metres (bcm) this year after sales of 54 bcm last year. Algeria has traditionally relied on long-term gas contracts indexed to oil prices with partners such as Spain and Italy to guarantee stable energy revenues. But it has occasionally flirted with the idea of more deals based on spot prices. “Sonatrach reviews its long-term contracts to adapt to the market. It is no longer contracts of 20 to 25 years but rather 10 to 15 years. We are positioning ourselves in both spot and long term to get the best from the market,” Sonatrach CEO Amine Mazouki told reporters at Hassi Messaoud oilfield. Algeria’s contracts with Europe are due to expire through 2021 and European firms are pushing for more flexible deals. Source

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