Gasunie to contract its first Interconnector deal

Jul 29, 1997 02:00 AM

July 11, 1997 Dutch Gasunie expects to conclude very soon its first deal to buy North Sea gas via the Interconnector. The gas is required to supply Italy's SNAM with whom Gasunie has signed two long term supply deals. Gasunie has agreed to deliver more than 80 billion cubic metres (bn cm) of natural gas to SNAM, the gas subsidiary of ENI, from the year 2000. It has also prolonged an existing contract by six years, adding another 40 billion cubic metres to the contract. The total 120 bn cm of gas is worth about $ 9.6 billion.
The deal represents a new step in Gasunie's attempts to become a leading player in a liberalised European energy market and its gradual shift from simple gas supplier to trading company.
Last September, the Dutch government granted Gasunie permission to increase its export contracts by 240 bn cm and its imports by 120 bn cm, allowing Gasunie to prolong many of contracts by five to six years. The 40 bn cm extension of the existing SNAM contract is part of this larger allowance.
The 120 bncm of imports are largely accounted for. Russia's Gazprom will supply some 80 bn cm and Gasunie expects to have a further 40 bn cm over the next 20 years as it loses domestic market share to competitors. The SNAM deal adds a requirement for a further 80 bn cm, which in the initial stages at least, seem likely to come from the U.K. and Norwegian reserves in the North Sea.

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