The supply of natural gas to Spain may become complicated in the coming months, especially for Naturgy. Yesterday, Algeria launched a harsh threat to the largest Spanish gas company, warning of an alleged supply cut if the company changed shareholders following rumors of a purchase offer by the Emirati company Taqa.
Naturgy downplayed this warning and recalled that the relationship with Sonatrach dates back more than 50 years. The first contract was signed two years after the creation of the state company, making both companies the oldest commercial partners in the supply of gas to Europe. During all these years there have been no breaches by either party. Even in delicate political moments on both shores of the Mediterranean, contracts have not failed to be honored.
Sources from the gas company also explain that the contract with Sonatrach does not include supply clauses (the current ones expire in 2030/31), which are affected by shareholding changes. In fact, these changes have occurred in the past – to introduce GIP or CVC – and have had no impact.
Another source of tension is in the European Commission, which has proposed including liquefied natural gas in the sanctions package to appease the Kremlin’s war machine after its two-year-old military invasion of Ukraine. And it is proposed to do so with a fourteenth package of sanctions in which, as a novelty, it proposes including liquefied natural gas (LNG) among the new round of penalties against Moscow. The proposal formulated by the European Commission and the European External Action Service and transmitted to the countries includes a proposal that will now be debated by the representatives of the Member States for subsequent approval, which requires unanimity.
The proposal includes measures to avoid transit between gas ships and to access the construction of new LNG plants, according to sources consulted by this newspaper.
The new package of sanctions would affect exports of Russian gas from the EU to third countries but would not, according to the proposal, affect direct imports of this hydrocarbon from Moscow. The new round of sanctions will also veto the EU’s involvement in LNG projects in Russia.
The Russian military invasion of Ukraine left a scenario of energy crisis in the EU. The high dependence of the community bloc on Moscow gas only provided a weapon of blackmail to the Kremlin, which used trade with this hydrocarbon as a measure of pressure on the bloc at the gates of winter. The EU had no choice but to diversify its supply to fill subsoil gas reserves. The objective was to reach storage levels that would guarantee supply during the winter. The United States took advantage of the opportunity and wanted to take over from Russia, with the closing of several LNG contracts to the EU.
Spain has become the country in Europe with the largest flow of imports of this hydrocarbon from Russia. It closed 2023 with an increase in LNG imports from Russia of 43% compared to 2022. In addition, the closure of the Maghreb gas pipeline has led to a six-fold increase in dependence on Russian gas. It is the second customer of Russian natural gas, behind China.
Naturgy maintains a contract to purchase Russian gas with the Yamal LNG plant but it would not be part of this package of sanctions. BlackRock CEO, Larry Fink, will visit Spain today.
At the moment, the president of Naturgy, Francisco Reynés, did not plan to hold any meeting with the manager who is advancing in the purchase of GIP, a shareholder of the gas company.
