ALGIERS (Reuters) – Algeria and Spain have agreed to let Spain’s Gas Natural take a 10 percent stake in the Medgaz undersea pipeline project, Algerian Energy and Mines Minister Chakib Khelil said on Monday.
Speaking in an interview on state radio, Khelil added that the agreement was conditional on Algeria’s state energy firm Sonatrach obtaining the right to sell gas directly in Spain.
A Spanish Industry Ministry source in Madrid said on March 6 that Sonatrach had won permission to sell up to 1 billion cubic metres (bcms) of gas in Spain from this year.
The Medgaz pipeline is intended to bring Algerian natural gas to Spain, France and Portugal starting in 2009. “In the meeting that I had recently with the Spanish authorities we accepted to let Gas Natural participate as a new shareholder in the Medgaz project, the Medgaz company, with 10 percent which is currently held by Sonatrach — of course on condition that Algeria obtained direct marketing and sale in the Spanish market for the Sonatrach marketing company which was created for this purpose,” he said.
“We have asked for a marketing licence and we therefore await this licence from the Spanish authorities,” he said.
Sonatrach is the biggest partner in the Medgaz consortium, with 36 percent. Spanish oil and gas company Cepsa and power company Iberdrola have 20 percent each, while Gaz de France and Endesa have 12 percent each.
The 210 km (128 mile) pipeline, much of which runs under the sea at depths of up to 2 km, will have a capacity of 8 billion cubic metres (bcm) a year and should be ready mid 2009.
Sonatrach, Africa’s biggest company by revenue, now supplies gas to Spanish distributors in the form of liquefied natural gas (LNG) and via a pipeline that runs across Morocco.
The Algerian company already has a 30 percent stake in the gas sales unit of Cepsa.