June 16 (Bloomberg) -- OAO Gazprom, Russia's state-owned gas-export monopoly, plans to swap gas supply volumes with Sonatrach, Africa's largest natural-gas producer, to ``optimize'' fuel deliveries to Europe and beyond.

Gazprom, which opened its first African office today in Algeria, may swap gas in pipelines for liquefied natural gas cargoes from Sonatrach. It may also offer LNG from the Sakhalin-2 project in Russia's Far East for Sonatrach LNG swaps.

``We are talking about certain operations of swapping pipeline gas for LNG'' cargoes and also LNG cargoes for LNG at different locations,'' Alexander Medvedev, Gazprom's deputy chief executive officer, said in a phone interview from Algeria. ``This will be the best way to work'' to ``optimize gas supplies for European and not only European customers.''

The two companies compete in the European market, where Gazprom is the largest supplier with about a 25 percent share. Sonatrach, which supplies about 10 percent of Europe's gas consumption, plans to boost deliveries of the fuel by building two new LNG plants, expanding the pipeline to Italy and constructing two new links.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: June 16, 2008 07:57 EDT