ReutersReuters

Naturgy CEO expects gas prices to remain high as producers cash in

Natural gas prices look set to remain high, prompting producers to look at the amount they can charge buyers, Spanish gas group Naturgy's chief executive was quoted as saying on Thursday.

The price at which Naturgy buys gas from Algerian state-owned producer Sonatrach would rise "significantly" and be applied retroactively from January 2022, CEO Francisco Reynes told online newspaper elEconomista.es.

"There are two factors that influence price expectations. One is the screen that shows what has happened to the price in the past year, and futures, which look set to stay high."

"Algeria as a provider sees that and latches onto it."

Reuters previously reported that Sonatrach, which said last week it was reviewing prices with all its clients, was considering several different formulas to incorporate rising global gas prices into its contracts.

The intensity of European calls to shift away from natural gas to cut carbon emissions were also contributing to higher price expectations among producers, Reynes said.

"By putting that pressure on decarbonisation, we are increasing any gas producer's expectations of price rises."

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