Gaz de France and Sonatrach Extend Their LNG Contracts to 2019

Gaz de France has reached an agreement with Sonatrach to extend its supply contracts for liquefied natural gas (LGN) to 2019. Under current market conditions, these contracts represent a total annual amount of approximately 2.5 billion euros.

France thus confirms its relationship with Algeria where Gaz de France is the leading buyer of LNG. Gaz de France's supply of Algerian natural gas involves a total volume of approximately 10 billion cubic metres, and represents almost 15% of total supply by the Group in 2006, making Algeria one of its principal suppliers.

The 42 years of cooperation between Gaz de France and Sonatrach was also broadened at the end of 2006 with a new twenty-year contract involving the purchase of about one billion cubic metres of natural gas to be transported in Medgaz. This gas pipeline, in which Gaz de France is a 12% partner with Sonatrach, will link Spain to Algeria. Its commissioning is expected to begin in 2009.

Gaz de France is also involved in upstream activities in Algeria, where it holds exploration, appraisal and development rights over the oil and gas resources under the Touat permit, in the Sbaa basin. With a 75% share in the project, the Group is for the first time operator in Algeria. It presented its plan to develop and operate the field to the Algerian authorities during the summer of 2007, and production should begin at the end of 2011.

"This agreement will allow Gaz de France to ensure a significant part of French supplies until 2019. It represents an important step in the relationship which, for more than forty years, has bonded us with our Sonatrach friends", said Jean-Francois Cirelli, Chairman and CEO of Gaz de France, who explained that "these contracts will also allow Gaz de France to strengthen its position as the European leader in LNG".