Algeria’s state-owned Sonatrach and the Italian major ENI for an extension to several long-term gas contracts should be wrapped up in the coming months. The main contract is expected to cover a volume equal to 40 billion cubic feet of natural gas per annum. The Enrico Mattei pipeline that stretches from Algeria to Italy via Tunisia has been running at half-mast in recent years due to low Italian demand. With this now back on the rise, the Algerian firm would like to rekindle its partnership with Italy ( AEI 823). The future Sonatrach-ENI deal breaks away from the long-term contract mould that still dominates Algeria’s gas exports as it should only cover a 5- to 10-year period. Contracts were previously signed on for 20 years. Gas prices would then be fixed in reference to the Italian gas market and so hover around the spot price.
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