UPDATE 1-Naturgy agrees to renegotiate gas contracts with Sonatrach

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MADRID, Oct 8 (Reuters) - Spanish gas and electricity group Naturgy said on Thursday it had reached an agreement to renegotiate contracts with Algeria’s Sonatrach in a move to bring its purchases in line with a falling global market.

Reduced demand for gas globally due to the coronavirus crisis and oversupply in the market has dragged down prices, prompting companies like Naturgy to look to change their supply agreements.

The deal revises the arrangements on prices, volume and duration, Naturgy said in a filing to the Spanish stock market regulator, but gave no further details.

The original agreement, signed in June 2018, covered 30% of Spain’s natural gas imports by pipeline.

Imports have since slumped - Spain brought in a total of 34.081 gigawatt hours worth of natural gas in August, 10% less than in the same month of last year, national gas agency data showed. One third of that total came via pipeline, mainly from Algeria.

Naturgy will keep negotiating with its other suppliers and expects to reach new agreements by the end of this year, the statement said. (Reporting by Isla Binnie and Jose Elias Rodriguez. Editing by Jane Merriman)