Rampant inflation
Shortly after the war in Ukraine started, Sonatrach’s CEO Toufik Hakkar declared that he was a “reliable gas supplier to the European market” and “ready to support his long-term partners in case of a difficult situation”.
READ MORE Algeria: Sonatrach is on the right track
This support is now materialising in the form of an all-out revision of the agreements established between the Algerian company and its European counterparts as they seek to diversify their resources. On 28 September, the CEO of the Sonatrach group stated that he had revised the gas prices for six of its partners, following negotiations that had begun in February. Discussions are still underway with five others, reported the official APZ news agency, without disclosing any names.
The agreements finalised concern an increase in the quantities of gas exported, as well as an upward revaluation of prices, given the unprecedented inflationary trend in the world gas market caused by the war in Ukraine.
France, Italy, Spain…
For the moment, the only agreements signed and made public concern the Italian group Enel and its Spanish subsidiary Endesa. The new volumes and tariffs remain confidential, as negotiations are still ongoing with other partners. However, during a recent interview with Bloomberg, Hakkar said that gas flows to Italy would increase this year by 20% to around 25.2 billion cubic metres.
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In addition to Italy, an agreement on new pricing with Spanish gas operator Naturgy is expected to be reached “in the next few days”. Another major player is Engie, with whom negotiations are underway regarding a possible 50% increase in gas deliveries, according to the French energy supplier.
Among the world’s 10 gas exporting countries and the first gas exporting country in the Mediterranean, Algeria was the third largest gas exporter to Europe, after Russia and Norway, in 2021. The current context is about to completely overturn this ranking.
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