Algeria has agreed to strike out anticompetitive clauses in its gas deals with European Union countries in a move that bolsters the European Commission’s efforts to liberalise European energy markets.

In a deal agreed yesterday after years of negotiation, Sonatrach, the Algerian state gas company, will scrap “destination clauses” that prohibit buyers of Algerian gas from reselling the gas to a third party outside a designated market.

The Commission has fought hard against such clauses, which it believes to be anticompetitive as they enable gas suppliers to carve up territories and prevent a liquid market from developing across the EU.

Neelie Kroes, the Competition Commissioner said: “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.”

It may also help Algeria to secure more foreign investment. Destination clauses proved a stumbling block in gas investments made by companies including BP.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts