Algeria boots out two Spanish companies from LNG project

Sonatrach, the Algerian state oil company, has abandoned a €5.2Bn ($7Bn) LNG project involving the Spanish energy companies Repsol YPF and Gas Natural. Repsol and Gas Natural, who held 48% and 32% respectively in the Gassi Touil project, described Algerian government’s decision as “unlawful”. Gassi Touil had been the only such project in Algeria controlled by foreign companies, but a new law requires Sonatrach needed to have at least a 51% share. Negotiations have been underway between Spain and Algeria for several months trying to find a solution that was politically acceptable, with many counter claims passing between them. Algeria used the fact that the two Spanish companies had made little progress in building an export terminal – a key issue in taking over the project. Delays and cost overruns had pushed the project back two years to 2011. There is now talk of international arbitration.