LONDON - Algeria's state oil and gas producer Sonatrach is negotiating ways to benefit from significant global gas price rises in its long-term contracts with European buyers, two sources familiar with the matter told Reuters.

Sonatrach is considering several options, including a partial link to spot price gas prices in contracts that have historically been linked to the price of Brent crude, the sources said.

Concern over Russian gas supply to Europe has sent benchmark front month and day ahead Dutch TTF gas contracts up more than 80% and 110% respectively so far this year, with the market hitting record highs in March following Russia's invasion of Ukraine. Brent rose 55% in the same period.

Algeria's role as a gas supplier for Italy, Spain and other Southern European countries has heightened significance due to the conflict in Ukraine and Europe's imposition of sanctions against Moscow.

Russia recently reduced supply to Europe via the Nord Stream 1 pipeline to 40% of its capacity, with politicians warning that flows could be completely suspended.

Algeria and other sellers are trying to find ways of recouping lost revenue stemming from long-term contracts being reliant on a single pricing index.

But the pricing reviews come at a difficult time for Europe, as countries scramble to fill storage facilities ahead of the winter heating season and draw up contingency plans for the potential disruption of Russian flows.

"Sonatrach has very strong bargaining power because it has got the gas, and realises that Europe needs it," one source said.

"Buyers now realise they are being stuck between a rock and a hard place," he added.

Reuters has contacted Sonatrach for comment.

A second source said the company is seeking to review prices with companies that receive gas through the undersea Medgaz pipeline, including Naturgy, Cepsa and Endesa in Spain, Engie in France and Galp in Portugal.

"They are kicking around everything, keeping Brent formulas, including TTF formulas. They are asking for an increase similar to the increase in international (gas) prices and the excuse is that TTF is very expensive," he said, adding that prices in long-term contracts are usually based on long-term averages rather than daily prices.

"They might be offering one company all TTF, another all Brent, someone else a mix because they are negotiating with everyone. They are skilled negotiators and will try to get the most they can."

A Naturgy spokesperson said negotiations were ongoing, and declined to comment on the details, adding that the company's relationship with Sonatrach was good. Cepsa declined to comment, while Endesa, Engie and Galp did not immediately respond to requests for comment.

Tamir Druz, managing director of consultancy Capra Energy said Sonatrach's Brent-indexed customers had gained a huge discount relative to TTF and other global gas indices, and price review provisions in its sale and purchase agreements (SPAs) should allow the company to recoup a good portion of lost revenue.

Increased demand for energy has brought relief to Algerian public finances after years of declining oil sales that slashed foreign currency reserves. The country's energy revenues are expected to rise to $50 billion by end-2022, from $35.4 billion in 2021.

(Reporting by Marwa Rashad in London and Isla Binnie in Madrid; Editing by Veronica Brown and David Evans)