Sonatrach-Gazprom cooperation accord has ended up in failure, says Sonatrach CEO
Sonatrach CEO Mohamed Meziane has said that the cooperation accord concluded between Algeria ’s Sonatrach and Russia's Gazprom in August 2006 has failed to meet its objectives owing to several untoward factors.
Algeria is interested in expanding its reach into the European gas market – an effort that would help counterbalance Russia’s dominance – but European officials must do more to attract foreign producers if they want a stable gas supply Mohamed Meziane pointed out.
European regulators’ disregard for producer interests is encouraging gas exporters to divert an increasing share of supplies elsewhere, he added.
“If you want to have a stabilized market and more competitors, you have to take into consideration the interest of all parties,” Mohamed Meziane said.
Amid surging consumption and a preference for cleaner-burning natural gas, European demand for gas imports is expected to increase sharply in the years ahead.
Algerian Oil Minister Chakib Khelil in recent days has said the country is being penalized by long-term European contracts that deprive it of a fair price for gas, while Meziane has criticized European governments and their former gas monopolies of hampering competition that would benefit consumers.
Meziane said the international gas market is changing and that it’s becoming increasingly attractive for producers to sell their supplies as liquefied natural gas, or LNG, which can be easily diverted to markets with the highest bidders.”
Sonatrach now sells about 10 percent of its production on the spot market. However, he said, the company plans to boost that to about 25 percent to 30 percent as its LNG production capacity increases over the next few years as new projects come on stream.
Russia and Algeria account for the bulk of European gas imports at present, accounting for about 25 percent and 10 percent, respectively. A total of 85 percent of European gas consumption, up from the current 50 percent by 2030.