By Christian Lowe and Hamid Ould Ahmed ALGIERS (Reuters) - Algeria may let some clients reduce the amount of gas they buy but is unlikely to follow Europe's other gas suppliers by incorporating spot market prices into its contracts, its energy minister said on Monday. Norway's Statoil and Russia's Gazprom, responding to a supply glut on the European gas market, have offered to cut obligatory volumes to some clients and sell any gas they take above the new minimum level at spot prices. But Algerian Energy and Mines Minister Chakib Khelil said in an interview that if clients negotiated a cut in the volumes they were obliged to take, and then decided to buy gas above the new minimum, Algeria would not guarantee to supply it. "I don't think we are going to be factoring (spot prices) in the long-term contracts, but we are going probably to look at other ways of reducing volumes, let's say in the long term," Khelil told Reuters. "But again, the client is taking the risk, so when he wants to come back he may not find the volume there, somebody else will have taken it." "If he offers the best price we will be very happy to sell it to him but it is not necessarily him that is going to get that (gas on the) spot gas market," said Khelil. Weak industrial demand brought on by the global economic downturn, combined with a glut of liquefied natural gas (LNG), has put downward pressure on the price of gas supplied via pipeline, which for decades has been linked to the price of oil. GAS PRICE COORDINATION The concessions made by Gazprom and Statoil to clients in weakening the link to the oil price could represent a major transformation in the European gas market, and analysts have been looking to see if Algeria would follow suit. Algeria is an important player because it supplies about 20 percent of Europe's gas and this year holds the presidency of the Gas Exporting Countries Forum (GECF), whose members control nearly 70 percent of the world's gas reserves. The Algerian city of Oran will host the next GECF meeting in April. Some analysts have said exporters who do not make concessions on pricing could lose market share. But Khelil said competing for market share would hurt all Europe's gas suppliers. The GECF, often referred to as the "gas OPEC," could instead coordinate any changes in pricing policy between members, he said. Another option under consideration by the forum was coordinated cuts in supplies to the gas spot market. "If there is a huge surplus in the spot market, maybe there is a chance there not to supply," said Khelil. LIQUEFIED GAS RECOVERY Khelil said he was bullish about the prospects for the global LNG market, which has slumped because of the downturn and an increase in domestic gas output in the United States. "We think that this is just a transitory problem and it is going to pass away within two or three years and things will come back again," Khelil said. The fuel accounts for 40 percent of Algerian gas exports and output will rise when it completes two new LNG plants by 2014. On the outlook for crude, Khelil said he expected that by the end of this year world prices would be about $80 a barrel or slightly higher, which he said he considered a fair price. He said he expected the Organization of the Petroleum Exporting Countries (OPEC) would leave production quotas unchanged at its next meeting, in Vienna on March 17. The energy minister said Algeria would award new oil and gas permits to international energy firms in a licensing round to be completed by December. He said he saw no need for changes in the financial terms on offer, a move some in the industry had been calling for after only three out of 10 permits on offer were awarded in the previous bidding round last year.