Gas Natural ready to pay $2 billion to Sonatrach   Leave a comment

Spain’s Gas Natural Thursday announced that it was ready to pay $1.97 billion to Algeria’s energy group Sonatrach to solve the commercial conflict which goes back to 2007.

  • In 2007, the Spanish company rejected Sonatrach’s decision to raise gas price by 20 percent. Algeria asked the company for compensation for the delay in achieving Gassi Touil project in the south.
  • The International Court of Arbitration approved Sonatrach’s right in raising the price of gas exported to Spain since 2007. That will oblige the Spanish company to pay about $2 billion.
  • Gas Natural’s CEO Rafael Villaseca Thursday said he expects that a solution would be reached to resolve the conflict with Israel in the second trimester.
  • Gas Natural gets the third of its gas needs from Algeria by virtue of long-term contracts valid until 2021.
  • Gas Natural’s withdraw from the Gassi Touil project was a painful blow to the trust relationship between Algeria and Spain. The Algerian government asked Gas Natural to respect its commitments, pay its taxes, compensate Sonatrach and bear possible losses.
  • The Spanish company was supposed to pay delay tax estimated at $4 million per month. Yet, Spain started putting strong pressures on Sonatrach and preventing it from marketing gas in a direct way in the Spanish market. It limited Sonatrach’s share in the market by one billion cube metres per year.
  • Algeria’s natural gas losses in 2000- 2004 are estimated at $14-18 billion.

Posted May 12, 2011 by newworldconsulting in Uncategorized

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