EU wins Algerian gas deal

The Commission has won an end to territorial restrictions and profit-sharing agreements that previously prevented European companies reselling Algerian gas into EU markets. At the same time, the Commission has given its support to a new pipeline that will bring Nigerian gas into the EU through Algeria.

Anti-trust Commissioner Neelie Kroes hailed the outcome of negotiations with Algerian authorities, concluded on 11 July, as “a major breakthrough in our relations with one of Europe’s most important suppliers for natural gas”. She said the move “eliminates an important obstacle for the creation of a single EU-wide market in gas”.

Until now, natural gas shipments from Algeria have been subject to profit-sharing and territorial-restriction agreements signed with Italian, Portuguese and Spanish energy firms, which have kept the gas from being sold into EU markets beyond the Mediterranean region.

Italian energy frim ENI, for example, had previously agreed with the state-sponsored Algerian energy giant Sonatrach to limit gas sales to within Italy’s borders.

This is not the first time that the Commission has intervened in such cases: ENI and the Austrian firm OMV were both obliged to delete restrictive clauses from their contracts with Russian natural gas supplier Gazprom (see Commission press releases for ENI in 2003 and OMV in 2005).

Meanwhile, Sonatrach and the Nigerian National Petroleum Corporation are planning the Trans-Saharan Gas Pipeline (TSGP), which will transport up to 30 billion cubic metres of Nigerian natural gas across more than 4300km of desert to EU markets, starting in 2015. 

At a 9 July conference in Brussels designed to attract partners and investors for the project, the TSGP was endorsed by Energy Commissioner Andris Piebalgs as a “promising supply source and route for the EU”.

The TSGP has been in the planning phase for some time but has never attracted enough attention as a viable venture. This is expected to change, however, since the EU is looking to a variety of producer nations to meet rising demand for natural gas, which is expected to increase by at least 1.7% annually over the next decades. 

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