MADRID, Sep 20 – PRIME. Algerian state-owned Sonatrach, which has been renegotiating its long-term agreement with Spain’s Naturgy to supply natural gas to the kingdom for more than a year, is aiming to more than double gas prices for Spain, 20 Minutos newspaper reported.
To date, the prices for Algerian gas are formed in accordance with the prices for Brent crude oil. As of 13.54 Moscow time, the price of November futures for Brent crude grew by 0.03% to $92.03 per barrel.
However, now Algeria is trying to start selling its gas on the index of the largest European hub TTF, which is significantly influenced by Russian gas prices, the newspaper writes. As of 14:17 Moscow time, the price of November futures for TTF gas is 199.49 euros per MWh, which is more than twice the Brent index.
Algeria’s intention to switch to the TTF comes amid EU efforts to reform the way gas prices are set and reduce the impact of the TTF on numbers that the European Commission considers highly volatile, opaque and speculative.
Spain is considered one of the EU countries with the widest list of natural gas suppliers. According to the EpData information platform created by Europa Press, among the traditional gas exporters to the kingdom are Algeria, the United States, France, Russia, Equatorial Guinea, Nigeria, Norway, Qatar, Trinidad and Tobago.
However, Algeria is the second largest supplier of gas to Spain. So, according to the Spanish energy company Enagas, in August 2022, Algeria accounted for 24% of all purchases of the kingdom. Thus, when switching pricing from the Brent index to the TTF index, gas prices are expected to increase significantly.
Over the past twelve months, the price of electricity in Spain has increased by 49.4%. According to the Spanish National Institute of Statistics (INE), this was the main factor behind the widespread price increase. Thus, in July, consumer inflation in the country accelerated to 10.7%, thereby significantly affecting the economic situation of the country’s citizens.