The Diplomat
Naturgy is negotiating with the Algerian energy company Sonatrach to maintain the price of gas arriving in Spain from Algeria via the Medgaz pipeline, according to statements made yesterday by the president of the Spanish company, Francisco Reynés.
Reynes, who took part in the ‘Wake Up, Spain!‘ conference organised by ‘El Español’, said that to think today that a “revision” of prices by Algeria would mean a drop in prices “is to be out of touch with the world”.
Reynes’ words are connected to the situation created after the Spanish government’s backing of the autonomy plan for Western Sahara, which led to Algiers’ decision to recall its ambassador to Madrid for consultations, as a sign of rejection of the turnaround by Pedro Sánchez.
Sonatrach will maintain gas prices for the period 2022-2024, but is already renegotiating with Naturgy for the next period, and a few days ago, the Algerian company’s CEO, Toufik Hakkar, said that, despite the soaring prices of gas and oil due to the war in Ukraine, Algeria “has decided to maintain relatively correct prices for all its customers”. But he added that “we do not rule out recalculating prices with our Spanish customers”.
Asked whether Reynes believes that an increase in Algerian gas prices is likely, he said: “We’ll see”.
Despite this, he pointed out that the contracts that are made in this type of supply negotiations are long-term, so spot prices “have nothing to do with it (…), which means that contracts can be made at a better price as long as responsibilities and commitments are taken on”.
Reynés pointed out that currently only one of the two pipelines through which Spain receives Algerian gas, the Medgaz pipeline, which is owned 50% by Naturgy and 50% by Sonatrach, is in operation.
As for the security of gas supply from Algeria, Reynés pointed out that what can be expected of Algeria is that it “fulfils its contracts”, as it has done since the first contract was signed, so he ruled out any problems of this type.
