December 3, 2007 / 6:41 PM / 12 years ago

Algeria may drop long-term gas contracts -Khelil

ALGIERS, Dec 3 (Reuters) - Algeria could give up long-term contracts for its natural gas exports and opt instead for short and medium-term agreements that allow more flexibility on price, Energy and Mines Minister Chakib Khelil said on Monday.

The north African OPEC member may also boost liquefied natural gas (LNG) sales as part of the measures, state news agency APS quoted Khelil as telling French television channel Beur TV.

Algeria and Spain have been in talks to end a row over gas pricing after Algeria demanded a 20 percent increase on two existing contracts that together supply 9 billion cubic metres a year via a pipeline running through Morocco.

“We prefer to move towards LNG contracts and short-term contracts (5-10 years) for natural gas so that we can renegotiate prices more easily and, thereafter, take advantage of the gas spot market once it is implemented,” APS cited Khelil as saying.

The move would help Algeria avoid any dependency on its European customers, he added.

Algeria, Europe’s third-biggest gas supplier, hopes to increase its exports to 85 billon cubic metres by 2010 from 62 billion cubic metres currently. (Writing by Hamid Ould Ahmed; Editing by Tom Pfeiffer and Anthony Barker)

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