Spain’s Gas Natural Fenosa has signed an agreement with Algeria’s Sonatrach that will extend their gas purchase contracts until 2030, Pipeline Oil and Gas Magazine reported.
The Sonatrach agreement accounts for more than 40% of the Spanish company’s total procurement.
The deal “undoubtedly constitutes a significant milestone in the [Spanish] relationship with Algeria as this renewal guarantees the stability of gas supply to Spain,” Francisco Reynés, executive chairman of Gas Natural Fenosa, said.
The deal also ensures that Spain retains its diversified energy mix. Sonatrach supplies the Spanish market with both natural gas via pipelines – representing 30% of Spain’s domestic consumption – and liquefied natural gas.
Gas Natural Fenosa is currently one of Sonatrach’s two largest customers. Following the gas purchase agreement in 2011, Sonatrach acquired a 4% stake in Fenosa, becoming its largest shareholder.