Algeria shortens gas contracts to earn more

ROME (Reuters) – Algeria plans to shift from long-term gas contracts to deals lasting around five years to maximise earnings from rising fuel prices, Sonatrach’s chief executive said on Monday.

Gas contracts, often based on the cost of oil products, have traditionally been fixed for long periods, which has limited gains for gas producers from record high oil prices.


“We had long-term contracts for 15 to 20 years, but the market has changed. We find we’re always in the process of renegotiating contracts, so now we are going to set contracts for four to five years,” Mohamed Meziane told Reuters.

The remarks confirm a press report last week that Algeria would not sign any more long-term contracts for gas.

Reuters