Brussels, 05/09/2007 (Agence Europe) - The Commission has expressed concern about the open conflict between Spanish energy companies, Repsol YPF and Gas Natural, and the Algerian state-owned company, Sonatrach, further to the latter's announcement that a contract on natural gas exploitation in Algeria, signed by the Spanish firms, has been cancelled. “There is good reason for concern”, said Ferran Tarradellas, spokesman for Energy Commissioner Andris Piebalgs, on Tuesday. “We are looking into this row very closely”, he said, adding that they wished to see it resolved very soon through dialogue. He assured that Mr Piebalgs was in close contact with the Spanish authorities and the companies involved. In 2004, Algiers had given its agreement for Repsol YPF and Gas Natural to participate in the creation of a joint venture responsible for exploitation of the Gassi Touil site. According to the terms of the contract, Repsol YPF and Gas Natural respectively held 48% and 32% of the project estimated at a value of €5 billion. This was the first contract of this kind ever granted to a foreign company in Algeria. Cancellation of the contract comes after months of rowing between Algiers and Madrid, Algeria having decided in July to refer the matter to the Spanish courts and to inform the Commission of the dispute between Algeria and Spain over the share of gas that Spain is authorised to market in the joint Medgaz pipeline project. Sonatrach reproaches the Spanish companies for delays and excessive costs in the construction of the gas terminal foreseen in the project that must allow the first GNL expeditions in 2009. Denouncing Algiers' political intervention in Sonatrach, Repsol YPF and Gas Natural said they deplored the decision taken by Algeria to “illegally appropriate the project”. (eh)