Spain's Fenosa Buys Stake in Algerian Pipeline Operator

Gas Natural Fenosa of Spain and Sonatrach of Algeria have signed an agreement for the purchase from the latter of a 10% shareholding in Medgaz, SA, and 10% of shareholders loan for €61.9 million.

Medgaz is the company which owns the property and operates the Algeria-Europe underwater gas pipeline connecting Beni Saf with the Almeria coast, with a 8 bcm per annum capacity.

The acquisition of this shareholding is associated to the transfer to Fenosa of 10% of the gas pipeline’s transport capacity. This capacity will be used for a new supply contract of 0.8 bcm per year. The supply contract lasts for 18 years and deliveries will begin next month, the company said.

In a statement, Gas Natural Fenosa said it continues to strengthen its gas supplies and to consolidate its relationship with the Algerian company, with whom it has already signed long-term gas supply contracts for a total of 9 bcm of gas, transported to Spain through Morocco and the Straits of Gibraltar by means of the Maghreb-Europe gas pipeline, of which it is the majority shareholder.

The new supply contract and the purchase of 10% of Medgaz by the Spanish energy multinational is part of the set of agreements reached between the company and Sonatrach in June 2011, which permitted the groundwork to be laid for a stronger collaboration.