Algeria talks tough on gas renegotiations

Industry observers had predicted changes to the structure of long-term gas contracts. But Sonatrach and the government appear uncompromising

Algeria's long-term pipeline gas and LNG supply contracts with European customers have been up for renewal in recent months. Received wisdom was that it would follow the lead of Russia and Norway in including a much larger element of hub-based pricing to replace some of the traditional oil price linkage in the contracts. In return, customers were expected to concede some of the flexibility built in to the take-or-pay contracts, and potential reduce overall volumes to leave state-owned oil and gas firm Sonatrach with more gas production for its own LNG portfolio. And this may have been how it played out in completed renegotiations or in those soon to conclude. But, if so, the Algerian governm