Italian Eni ups short-term supply from Algeria
Algerian state producer Sonatrach has amended a 1977 contract with Italian importer Eni for the coming gas year, the former said June 2. The two sides were meeting for a periodic contract review. The oil-indexed contract underpinned the TransMed (now Enrico Mattei) pipeline that runs from Algeria to Italy by way of Tunis.
"This amendment defines the principles of delivery by Sonatrach to Eni of additional volumes on the Italian market," the statement said.
While oil prices are high, spot gas prices in Europe are also very high, owing to depleted storage levels. Summer gas demand is strong as traders scramble to reinject.
Depending on the contract, today's Brent crude price of around $68/barrel could translate into a gas price of around $9.50-$10.0/mn Btu next autumn, the start of the European withdrawal season. Gas for July delivery is already trading at $9.20/mn Btu at the Dutch hub.
This addendum “reaffirms the commitment of the two parties to consolidate their existing relations and pursue their traditional partnership, once again indicating their willingness to strengthen long-term co-operation between the two companies,” Sonatrach said.
The two companies also examined the initiatives underway on training, bio-refining, international opportunities and renewable energy projects," Sonatrach said. But there was no mention made of a possible transfer of BP's Algerian assets to Eni, which was reported June 1.