* Gas Natural says to pay $1.897 bln as part of agreement
* Deal gives Sonatrach option to acquire Gas Natural stake
* Shareholding will not exceed 3 percent: Sonatrach CEO
(Adds Gas Natural share price)
By Lamine Chikhi
ALGIERS, June 14 Algeria's state-owned
Sonatrach and Spanish utility Gas Natural (GAS.MC) said on
Tuesday they have settled a long-running dispute with a deal
that involves the Spanish firm paying $1.897 billion to
The Algerian energy firm will also have the opportunity to
acquire a minority stake in Gas Natural as part of the
agreement, which draws a line under a dispute over the prices
Gas Natural pays for Algerian gas imports.
"This is a very important deal as it puts an end to five
years of dispute," Sonatrach Chief Executive Nourredine
Cherouati said at a ceremony to sign the deal.
"Our stake in Gas Natural will not exceed three percent,"
Sonatrach, which has a monopoly on Algerian energy exports
and is Spain's biggest natural gas supplier, took Gas Natural
to an international arbitration court to demand the Spanish
firm pay higher prices for natural gas imports.
Gas Natural contested the claim and challenged a court
ruling which ordered it to pay up to 2 billion euros ($2.89
billion) in retroactive gas price increases.
Gas Natural's shares closed up 1.56 percent at 13.320
euros, broadly in line with the stock market.
Speaking at the signing ceremony in the Algerian capital,
Gas Natural Chairman Salvador Gabarro said: "Sonatrach is our
biggest supplier and this agreement puts in place a favourable
framework for the development of future relations between the
In a statement, Gas Natural said the payment of $1.897
billion was in line with a revision of prices between 2007 and
May 2011 and would have no impact on earnings.
It said Gas Natural could participate in various Sonatrach
projects and "in developing other business opportunities."
A separate statement issued by Sonatrach on Tuesday said
the deal covered the "settlement of all the disagreements
existing between the two companies."
The deal also gave Sonatrach "opportunities for
collaboration in other areas, including the acquisition of a
minority stake in Gas Natural's equity," the statement said.
(Additional reporting by Judy Macinnes in Madrid; writing by
Christian Lowe; editing by Marguerita Choy)