Eni Will Reduce Gas Purchase from Algeria

Italy’s energy firm Eni will reduce the quantity of gas it buys from Algeria.

Eni and Algeria's Sonatrach have agreed on a package solution for 2013 and 2014 within the framework of their commercial discussions under the existing gas contract, Eni said.

“This agreement is part of the renegotiations program started in the recent months, and contributes to the announced objectives of profitability and cash generation,” the Italian firm said.

The renegotiation of long-term contracts has become widespread across Europe's gas industry as low spot prices on the wholesale market, depressed by a flagging economy, make many existing agreements unprofitable, Reuters said in a separate report.

"It's significant since it shows they (Eni) mean business. The renegotiations were included in company guidance and that must be good news," Reuters quoted Santander oil analyst Jason Kenney as saying.