Gas Natural Fenosa and Sonatrach Resolve Dispute

Gas Natural Fenosa and Sonatrach. have entered into an agreement in settlement of the dispute on contracts for gas sales to Spain.

The dispute arose when Gas Natural challenged increases in natural gas rate applied from 2007 by Algerian state-owned gas supplier, which supplies about a quarter of gas consumed in Spain through the Maghreb-Europe gas pipeline.

As a part of settlement, Sonatrach signed  an agreement to subscribe for shares representing 3.8504% of the Spanish company.  Gas Natural will acquire a stake in the Medgaz pipeline to Algeria and the possibility of taking stakes in projects by the Algerian company.

Sonatrach owns 36% interest in the Medgaz pipeline, together with Iberdrola, Cepsa, Endesa and Gaz de France holding lesser stakes. The 8 billion cubic metre Medgaz pipeline became operational in May.

Last November Gas Natural said it was obligated to pay $ 1.97 billion (1.43 billion euros) after arbitration in August 2010 found in favour of Sonatrach.