algeria, March 26, 2019

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Sonatrach: Algeria has never provided customers with free gas

Asked about the news reported by some media outlets on the alleged free-of-charge gas export to France, Mazighi added “it is impossible to provide France or another country with free gas or other (hydrocarbons) liquids.”

“I want to recall the rules of exporting operation. For a hydrocarbon molecule leaves the Algerian soil, there must be a customs declaration. The declaration includes a measured volume associated with a price. Without a declaration of the price and the volume, we cannot export,” added the same official.

In the past, we had two cases of exception: in 2004 when we had to temporarily export our crude to our storage capacity in Korea. The crude, in this case, had left Algeria with a temporary invoice. The second exception concerned the crude oil processing which began in 2018: the title of ownership is transferred to a customer and we you are accountant of gasoline and diesel oil import statement to customs.

So, he summed up, “to the question of whether the Algerian gas was exported to France free of charge, the answer is NO”.

Besides, the SONATRACH vice-president for Marketing Activities said that for natural gas contracts come into force, they need to be approved by the Company’s social bodies and by the public authorities.

“In the field of natural gas, unlike other liquid products, things are very well regulated. Do you think that the company’s bodies or authorities can approve a contract or endorsement with a price equal to zero? Never,” he insisted.

Mazighi also said that under the bill 05/07, “Sonatrach has to declare, on a monthly basis, the export prices of natural gas, LPG, crude or refined products. If there is any doubt about prices, Sonatrach is audited by the National Agency for the Development of Hydrocarbon Resources (Alnaft).

As regards, Algeria’s relations with the French partner in the field gas, “first we must say that we export GNL to France. This relation goes back to 1976. Four contracts were concluded: three of these contracts were signed in 1976 and the fourth in 1991. Out of the four contracts, two expired in December 2013. At present, only two contracts remain in force: the first is on exports of 3.5 billion m3 / year until 2020, while the second concerns a volume of 2 billion m3 / year until 2020, “he explained.

“Since 1976, we have concluded four contracts with France, which have allowed to export, until now, 390 billion m3 of LNG, the equivalent of seven years of gas export,” he added.

According to him, the volume of gas exported to France represents 10% of Sonatrach’s overall gas exports portfolio.

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