Brussels, 11/07/2007 (Agence Europe) - On Wednesday, the Commission and Algerian authorities reached agreement on gas contracts linking the EU with Algerian energy company Sonatrach. “The agreement reached constitutes a major breakthrough in our relations with one of Europe's most important suppliers for natural gas and eliminates an important obstacle for the creation of a single EU-wide market in gas,” said Competition Commissioner Neelie Kroes in a press release. The agreement can be summarised as follows: - deletion of territorial restriction (preventing the gas purchaser from reselling the gas outside a geographic sector) from all existing contracts and no insertion in future contracts; - profit sharing mechanisms (PSMs) only to be applied in liquefied natural gas (LNG) contracts under which the title of the gas remains with the seller until the ship is unloaded (in practice, sales under DES terms): consequently, Sonatrach is aiming to transform the remaining FOB and CIF existing LNG contracts to sales under DES terms; - no PSMs in future LNG contracts under which the title of the gas passes to the purchaser at the port of loading (in practice, for sales under FOB and CIF terms); - no PSMs in existing or future pipeline gas supply contracts. (eh)