Algeria’s Sonatrach Tightens Its Grip On Spanish Gas Market

Sonatrach tightened its grip on Spain’s gas imports for the second month in a row. Algerian gas sales to Spain during last October reached their highest rate in 2020, covering 53.1 percent of Spain’s gas purchases during the same month.

It is striking that Sonatrach has “subdued” its competitors by holding sway in the Spanish gas market after months of decline, especially compared to the Middle East and North America producers.

• These new data came according to a document issued by the Spanish Energy Stocks Management and Control Authority “CORES”, of which a copy is possessed by “Echorouk”, pertaining to the country’s imports of liquefied natural gas for last October, and comes especially after the implementation of the gas contract price review agreement concluded between Sonatrach and ” Spain’s Naturgy on October 8th.

• In the details of the document, Algeria’s gas exports to Spain reached about 150 million cubic meters last October, up from 100 million cubic meters in September 2020, according to previous figures released by the same Spanish authority.

• Sonatrach’s gas sales to Spain represented 53.1 percent of Spain’s gas purchases, with quantities exceeding 150 million cubic meters, compared to 100 million cubic meters last September, which represents 30.6 percent.

• By examining these figures, it becomes clear that Sonatrach has strengthened its position in the Spanish gas market by nearly 23 percent in one month (+ 50 million cubic meters), immediately following the signing of the agreement to review gas contracts with Spanish Naturgy, last October, which included lowering prices and more flexibility in quantities and additional years on contracts.

• As for Sonatrach’s competitors, who gained important shares in the Spanish market for gas during the past months, their sales witnessed a noticeable decline, especially producers from the Middle East (Qatar), a decline of 59 percent, and exports from Central and South America slumped by 75 percent, and North America by 14 percent .

• The data of the Spanish Energy Stocks Management and Control Authority “CORES” showed months ago that Qatar had snatched the top gas supplier to Spain from Algeria for the first time in history, as its exports of this energy product to Spain reached about 23.9 percent of this country’s needs, while it reached for Algeria about 22 percent during July 2020, in the midst of the talk about reviewing the prices of gas contracts between Sonatrach and Naturgy.

• In a related context, the cold winter that looms over large parts of the European continent during the first month of the season is expected to have a positive impact on Sonatrach’s gas exports, unlike the winter (2019/2020), which was warm, according to observers.

• According to statements made by former Energy Minister Mohamed Arkab, the warm winter in Europe (the most important destination for Algerian gas) reduced exports by about 22 percent, which is unlikely during this year, given the cold winter expected for Europe, which will shore up gas consumption, despite the warm month of November more than usual.