Algeria, Spain vow to resolve gas pricing row

ALGIERS (Reuters) - Algeria and Spain expressed readiness on Wednesday to end a row over gas pricing after the North African country had said it wanted a 20 percent hike.

Algeria said last month it was negotiating the increase with Spain's dominant gas company Gas Natural.

The hike covers two existing contracts, which together supply 9 billion cubic metres a year of gas to Spain via a pipeline that runs through Morocco. Algeria also sells Spain liquefied natural gas (LNG).

Algian Energy and Mines Minister Chakib Khelil said it would affect 30 percent of the gas used in Spain and would be a staged increase, perhaps every six months.

"Algeria and Spain should reach a solution that is acceptable by the two parties," visiting Spanish Economy Minister Pedro Solbes said on Wednesday.

"The two countries are working to reach a solution as soon as possible," Algerian official news agency APS quoted Solbes as adding after talks with Finance Minister Mourad Medelci.

"We are eager to find a solution and we have high hope that that solutions will be found," Medelci said.

Figures from gas association Sedigas show Spain consumed 35 billion cubic metres of gas last year, of which 32 percent came from Algeria. Some 24.5 of Spain's gas came from Algeria by pipeline and a further 7.5 percent by ship as LNG.

Gas usage has grown rapidly in Spain in recent years, boosted by major power companies like Endesa and Iberdrola opening new combined cycle plants.

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