IEA: Portugal to rely on Algeria for gas

The International Energy Agency says Algeria will remain the major source of gas supply to the Portuguese market, despite diversification projects now under study. It also made some recommendations to the Portuguese government.


PARIS�The International Energy Agency says Algeria will remain the major source of gas supply to the Portuguese market, despite diversification projects now under study. It also made some recommendations to the Portuguese government.

Examining the Portuguese energy sector, the agency praised Portugal's move to rapidly introduce a natural gas network to balance its heavy dependence on imported oil. As Portugal is the last country in a three-nation supply chain involving Morocco and Spain, the IEA recommended that the government "monitor gas markets to ensure security of supply and adapt the regulations on gas storage to the future liberalization of the gas market."

The European Union has given Portugal a 10-year transition period during which it can prepare for open competition. After 2008, big consumers will be able to contract with different suppliers, depending on competitive pricing,

"In spite of possible diversification of suppliers, Portugal is expected to remain very dependent on a single gas supply source�Algeria," said IEA. Portugal is supplied by gas transiting from Algerian fields through pipelines via Morocco and Spain.

The IEA also recommended that Portugal increase its emergency oil stocks to bring them up to levels required under agency rules. In addition, it urged the Portuguese government to halt artificial pricing practices in the product market for gasoline and diesel.

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