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Khelil cracks Gassi Touil whip



By Upstream staff 

Algeria says Spain's Repsol YPF and Gas Natural are behind schedule at the Gassi Touil development, with the country's Energy Minister Chakib Khelil saying the pair must meet their deadlines.

"Algeria has asked them to meet their commitments under the contract because they won it in an international contest and other companies that did not win will complain," Khelil told Spanish financial newspaper Expansion in an interview published today.

Delays mean later tax payments to the Algerian state and undermine state energy group Sonatrach's ability to meet its delivery schedules, he added.

Repsol and partner Gas Natural have reported technical difficulties in developing the project in Algeria's southern desert, which involves exploration and extraction, plus building a liquefaction terminal to process the gas for export.

Khelil also said Algeria was unhappy with the way negotiations over the Medgaz pipeline to Spain were going.

Earlier this month Algeria had agreed to let Gas Natural buy a stake in the pipeline project in return for permission for Sonatrach to sell gas directly in Spain.

Asked why that deal had not materialised, Khelil said: "We haven't obtained authorisation without time or volume restrictions from the Spanish authorities."

Spain's Industry Ministry has given Algeria clearance to sell up to 1 billion cubic metres of gas per year from this year and said the deal could be extended in time and quantity.

Sonatrach in turn has agreed to sell 800 million cubic metres of gas per year to Gas Natural, which would make it eligible to buy a 10% stake in the 8 Bcm a year capacity pipeline, under the terms of the consortium's rules.

Sonatrach, the biggest shareholder in the pipeline consortium, has undertaken to support Gas Natural's case for a stake in talks with the other shareholders Cepsa, Iberdrola, Endesa and Gaz de France, Khelil said.

Asked about Algeria's threat to hike the price it now charges Spanish companies for gas, Khelil said the current price of gas was 20% below the market price, and added he was tabling proposals to increase the price in two stages.


Wednesday, 21 March, 2007, 13:31 GMT  | last updated: Wednesday, 21 March, 2007, 13:34 GMT

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