Italy Ups Algerian Gas Imports As Lower Oil Prices Feed Through Into Contracts

Exports of Algerian gas to Italy averaged 22.6mn m³/day for April (800mn cfd), twice 4Q 2014 levels. Volumes are set to keep increasing this summer, as the impact of lower crude prices gradually filters through oil-indexed long-term supply contracts.

Italy’s gas imports from Algeria rose sharply from 1 April, the start of the contractual summer delivery period. April volumes are up almost 70% on the March average of 13.4mn m³/day (470mn cfd), according to data published by Italian pipeline operator Snam Rete.

Some European natural gas buyers with long-term oil-indexed supply agreements from major suppliers, such as Russia and Algeria, decided to minimize the volumes taken under their take-or-pay requirements during 4Q 2014 and 1Q 2015 in anticipation of lower subsequent oil-indexed prices in the second and third quarters of this year. (CONTINUED - 1029 WORDS)