Algeria's Khelil calls for tax changes in Europe

Gas-consuming nations need to rethink their tax policies if they are to encourage gas imports and remove barriers, said Chakib Khelil, Algeria's energy minister, at a forum in Algiers.

March 2, 2009

Uchenna Izundu
OGJ International Editor

LONDON, Mar. 2 -- Gas-consuming nations need to rethink their tax policies if they are to encourage gas imports and remove barriers, said Chakib Khelil, Algeria's energy minister, at a forum in Algiers. He said that existing tax policies only protected narrow interests and hindered the expansion of the gas industry in Europe.

Algeria is the third-largest exporter of gas to Europe. Khelil said that, as gas is cleaner than coal, it must be given a tax advantage.

State-owned Sonatrach is constructing two major gas pipelines to Europe, each with a capacity of 8 billion cu m/year. Medgaz and Galsi are expected to be completed by yearend and in 2012 respectively. Sonatrach also announced plans to boost capacity of two existing pipelines linking it to Italy and Spain by 7.7 billion cu m in 2009.

But whether Algeria can deliver these output increases is questionable, according to analysts, considering the few companies that were awarded licenses in its latest licensing round, the location of small discoveries, and the need to build new pipelines to bring them to market (OGJ Online, Feb. 10, 2009).

Contact Uchenna Izundu at [email protected].